OFAC-compliant blocks on Ethereum hits three-month low of 47%

The percentage of Ethereum blocks complying with orders set by the United States Office of Foreign Asset Control (OFAC) has now fallen to 47% — the lowest since Oct. 11. 

The latest milestone in reversing censorship comes nearly three months after the percentage of OFAC-compliant blocks reached its peak at 79% on Nov. 21.

OFAC-compliant blocks are those that exclude transactions involving parties sanctioned by the U.S. Treasury Department’s Office of Foreign Assets Control.

A fall in compliant blocks could be seen as a win for those that oppose censorship within the Ethereum ecosystem.

In a statement, blockchain consulting firm Labrys, the creator of MEV Watch, said the fall may be attributed to more validators opting to use MEV-boost relays that do not censor transactions in accordance with OFAC requirements.

“In particular, the BloXroute Max Profit relay, Ultrasound Money relay and Agnostic Boost relay have picked up most of the change in market share.”

MEV-boost relays act as trusted mediators between block producers and block builders, which enables Ethereum validators to outsource their block production to other block builders.

Lachlan Feeney, the CEO of Labrys in a Feb. 14 statement said that he’s happy with how the Ethereum community has responded to the censorship issue since it first surfaced post-Merge.

He noted the recent fall in censorship-compliant blocks was particularly notable given it was achieved without a user-activated soft fork (UASF). He noted that “many members” of the Ethereum community had called for the soft fork prior to the merge to combat censorship.

“I am incredibly proud of the Ethereum community for the progress we have made with this issue,” said Feeney, adding:

“When we released the MevWatch tool drawing attention to a flaw within Ethereum, the community did not stick its head in the sand but instead rose to the occasion and made significant progress addressing the issue.”

However, “there is still more work to be done,” Feeney stressed.

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OFAC most notably sanctioned Ether (ETH) and USD Coin (USDC) wallet addresses that transact using the Ethereum-based privacy mixing tool Tornado Cash on Aug. 8.

After the first 24 hours of Ethereum under its new proof-of-stake consensus mechanism on Sept. 16, only 9% of blocks were OFAC-censored. 

However this figure sharply increased to 79% within a matter of two months on Nov. 21.

The percentage of OFAC-compliant blocks then hovered around the 68-75% range until Jan. 29 when it was 66%. Since then, it has steadily decreased despite a few minor spikes.