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More than 60% of validators in the Ethereum network, being large companies, are already under the control of the American authorities. The transition to a new consensus algorithm will mark the beginning of another era for the entire Ethereum community, where decentralization may be completely erased. It can only remain a digital footprint, a story that will become a myth, nothing more.
Therefore, the Ethereum community is increasingly worried about the centralization of the ecosystem. To this Conclusion fortune came. He notes that the community is concerned that powerful centralized organizations will appear as a result of the merger, and they will be accountable to US regulators.
Fears were further heightened when the Treasury Department’s Office of Foreign Assets Control (OFAC) imposed sanctions against Tornado Cash, a cryptocurrency “mixer” based on Ethereum.
According to representatives of the Ministry of Finance, since its inception in 2019, Tornado Cash has helped launder cryptocurrencies worth more than $ 7 billion. Most often it was used by members of the North Korean hacker group known as Lazarus Group.
The number of validators in the Ethereum network, subordinate to the US authorities, is growing, what will happen next
Community users are already sounding the alarm about the excessive concentration of compliant companies in the Ethereum ecosystem. According to Dune Analytics, more than 60% of validators on the Ethereum network, being large companies, will comply with any regulatory requirements.
Can the government put pressure on validators? Yes. And what can stop him from doing this? Moreover, over 66% of Beacon Chain validators will adhere to OFAC rules.
An example of censorship that has already taken place is obvious. Ethereum Infura and Alchemy have blocked access to Tornado Cash. Circle, the company behind the USDC stablecoin, has frozen addresses associated with Tornado Cash. Uniswap, a decentralized exchange on Ethereum, has reportedly blocked addresses associated with Tornado Cash.
Even Ethermine, Ethereum’s largest miner, has stopped processing Tornado Cash transactions, in what has been called “the first evidence that censorship has come to dominate block production.
Also, the Ethereum community is concerned about the possible censorship of meV-Boost “relay operators” or organizations that connect validators to block builders. The problem with them was so serious that it was discussed at the last meeting of Ethereum Core developers.
If censorship of user transactions is allowed, then decentralization can be forgotten forever. The authorities will definitely take advantage of this opportunity to further control the ecosystem.
If business cannot resist the demands of the US authorities, then the Ethereum ecosystem will become synonymous with the concept of censorship in the network. Everyone who uses the Ethereum ecosystem will be under the close scrutiny of US federal regulators.
#Centralization #Ethereum #validators