The Ethereum community has been divided on how best to respond to the threat of protocol-level transaction censorship in the wake of US government sanctions on Tornado Cash-linked addresses.
Over the past week, members of the Ethereum community have proposed social cuts or even a user-activated soft fork (UASF) as possible responses to transaction-level censorship on Ethereum, with some calling it a “trap” that it will do. more harm than good and others say it is necessary to provide “credible properties of neutrality and resistance to censorship” on Ethereum.
The heated debate comes after the Ethereum miner Ethermine decided not to process transactions from the now US-sanctioned Ethereum-based privacy tool Tornado Cash, which prompted members of the Ethereum community to worry about what. it would happen if other centralized validators did the same.
The Ethereum community is also discussing the effectiveness of social slashing to combat censorship on the Ethereum network, as the strategy could lead to a chain split with some validators processing transactions on the uncensored chain and others only validating the compliant chain. to the OFAC.
Social slashing is the process whereby validators have a reduced percentage of their stake if they don’t validate incoming transactions correctly or otherwise act dishonestly.
This could become a significant problem if regulators require major centralized staking services such as Coinbase and other major centralized pools, which together invest more than 50% Ether (ETH) in the Ethereum Beacon 2.0 chain to validate only OFAC-compliant chains. .
Cyber Capital founder Justin Bons argues that the cut “is a trap” that “represents a greater risk than the OFAC regulation” and will not be a viable solution to address censorship at the protocol level.
1/21) We are now at a critical crossroads for Ethereum
With the OFAC regulation that hangs over the ETH; threat of censorship
However, the biggest threat comes from within
Discussions about “social slashing”, multiple forks and unclear governance
Announce potential disaster in ETH:
– Justin Bons (@Justin_Bons) August 22, 2022
In a 21-part Twitter thread on Monday, Bons said the social cut swaps could “deprive innocent users of their deposits”, which “would violate their property rights.”
Bons also said that too many validators who comply with law enforcement on Ethereum “would lead to a chain split”, to the point where “censors start to ignore or fail to attest blocks that contain OFAC that violate TX”.
Ethereum podcast The Daily Gwei founder Anthony Sassano tweeted on Saturday that “collateral damage is inevitable in social slashing. […] Ethereum’s credible neutrality and censorship-resistant properties are worth protecting.
This is a less bearish result than the Ethereum network engaged in permanent censorship.
Collateral damage is inevitable with the social cut, but Ethereum’s credible neutrality and censorship-resistant properties are worth protecting at some point.
– sassal.eth (@ sassal0x) August 20, 2022
Meanwhile, developer Geth Marius Van Der Wijgen shared a similar sentiment stating that preserving censorship on the Ethereum network should be the Ethereum community’s top priority:
“If we allow the censorship of users’ transactions on the network, in practice we have failed. This is * the * hill I’m willing to die on. “
“If we start allowing users to be censored on Ethereum, then this whole thing doesn’t make sense and I’ll leave the ecosystem. […] I think censorship resistance is the highest goal of Ethereum and the blockchain space in general, so if we compromise, there isn’t much else to do, in my opinion, “he added.
Related: Tornado Cash ban could spell disaster for other privacy protocols – co-founder of Manta
Cryptocurrency researcher Erica Wall added that to date, censorship resistance has been a core property of the Ethereum network and that while we are seeing some censorship on the front end, “it will only become serious if censorship starts occurring on the side. of Ethereum itself. “
The Tornado Cash censorship debacle has plagued the Ethereum community for over a week.