Ethereum solo validators that censor blocks should ‘be tolerated’

Ethereum co-founder Vitalik Buterin believes that solo validators that choose not to include certain transactions should “be tolerated” to stop the Ethereum community from becoming the “morality police.”

Vitalik Buterin made the comment in reply to a Twitter poll from latetot.eth, discussing a hypothetical scenario whereby a validator censors a transaction that doesn’t align with their beliefs.

The thread, published on Oct. 17, asked what should happen if a solo validator, in a country at war with another, decides not to process a block because it includes donations to the opposing military force.

I’m a solo home validator in Country A. We are at war w Country B, and I decide that I’m not going to include donations to their military when it’s my turn to make a block. This validator should:
— latetot.eth (@latetot) October 16, 2022

According to Ethereum’s co-founder, the answer for a censorship case should be aligned with the level of transgression.

The post attracted notable attention, as Vitalik explained in the thread that any other answer would potentially lead to turning the Ethereum community into morality police:

I would say “be tolerated”. Slashing or leaking or socially coordinated anything should only be considered for massive reorging of other people’s blocks, not making wrong choices about what to put in your own.
Any other answer risks turning ETH community into morality police
— vitalik.eth (@VitalikButerin) October 17, 2022

In Ethereum proof-of-stake (PoS), validators decide what transactions to include in their blocks if any. PoS is a modern consensus method that powers decentralized finance (DeFi) projects and cryptocurrencies.

Validators are allowed to decide what transactions to include in a block. what we shouldnt do, is encourage staking services like Exchanges or Lido that are so huge and centralized that they can easily be coerced into cencoring by governments or other third party agents.
— mao (@5t4rman) October 17, 2022

Also answering the thread, Martin Köppelmann, co-founder of Gnosis and a long-time Ethereum decentralized application developer, said he agreed with tolerating the validator in that situation while warning about how MEV-boost censorship rising in Ethereum following the Merge.

For the record, in this specific poll, I would also vote for “tolerate”. But IMO the quick roll-out of MEV-boost in hindsight was a mistake and should have been done more diligently to prevent a situation where the content curation of 1 entity currently affects 52% of all blocks.
— Martin Köppelmann (@koeppelmann) October 17, 2022

Although the thread discusses a hypothetical scenario, concerns about censorship in the Ethereum network surged last week, with 51% of Ethereum blocks being compliant with the United States Office of Foreign Assets Control (OFAC) standards as of Oct. 14, as MEV-Boost relays take over market share one month after the Merge.

MEV-Boost relays are centralized entities acting as trusted mediators between block producers and builders. All Ethereum PoS validators can outsource their block production to other builders. Due to Ethereum’s upgrade to a PoS consensus, MEV-Boost has been enabled to a more representative distribution of block proposers, rather than a small group of miners under proof-of-work (PoW).

As noted in a recent opinion piece, Slava Demchuk, CEO and co-founder of AMLBot, the Ethereum upgrade could bring modifications in Anti-Money Laundering (AML) and Know Your Customer (KYC) practices in the crypto industry. He stated:

“U.S. regulators are increasingly expressing concerns about the huge sums circulating in DeFi without any control. As the Ethereum blockchain serves as the primary chain for most tokens, its recent shift from PoW to PoS may be used as an argument for their attempts to influence (at least a part of) the decentralized market.”