Top exchanges' ETH staking practices contribute to Ethereum censorship

The use of censoring MEV relays by crypto ecosystems and exchanges is one of the main factors hurting Ethereum's credibility as a neutral platform.

Being compliant with federal sanctions has a detrimental effect on the global reach of the majority of crypto ecosystems. With Ethereum, investors have a significant amount of control over how much the ecosystem complies with rules.

The Office of Foreign Assets Control's United States sanctions are complied with by nearly 60% of all Ethereum blocks created after the merge (OFAC). While the crypto community opposes this change, many do not recognize their own role in assisting Ethereum in achieving full OFAC compliance.

The practice of crypto ecosystems and exchanges censoring Miner extractable value (MEV) relays is one of the main factors undermining Ethereum's credibility as a neutral platform. MEV relays, which are used by well-known cryptocurrency players like Binance, Celsius Network, Coinbase, Kraken, and Cream Finance, to name a few, act as a middleman between block producers and block builders. Users directly aid in the censorship of Ethereum by staking Etheron platforms (as demonstrated above) that run censoring MEV relays on their validators. By implementing a non-censoring MEV-boost relay, crypto platforms can help to improve the situation.

Aestus, BloXroute Max Profit, BloXRoute Ethical, Manifold, and Relayooor are some of the well-known MEV-boost relays that don't support censorship for validators and relay operators.

As of this writing, 67 of the most recent 100 blocks of Ethereum were found to be enforcing OFAC compliance.

As investors, it's critical to recognize that protocol-level censorship undermines cryptocurrency's mission to unleash inclusive and open finance. It is crucial that investors and service providers choose non-censoring MEV-boost relays as a result. Recently, the Ethereum ecosystem saw two addresses that had been dormant for four years reactivate and send 22,982 ETH.

The ETH transfers in question were made by unidentified whales, who transferred 13,103.99 ETH and 9,878 ETH, respectively, to the trading platforms Genesis and Poloniex.

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