Ethereum OFAC-compatible blocks are down, according to recent data.
Ethereum validators also plan to apply an update that reduces OFAC compliance by 35%.
After this year’s to mergeEtherium [ETH] changed from a Proof-of-Work (POW) to a Proof-of-Stake (POS) network. Due to consolidation, validators are now responsible for protecting transactions and network integrity.
Read Ethereum’s [ETH] Price prediction 2023-24
However, censorship of blocks on Ethereum became a heated topic and the success of the merger was quickly forgotten. Some analysts were also dissatisfied with the dominance of OFAC-compliant MEV boost relays and blocks.
OFAC-compliant blocks on the rise
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) blocked the Tornado Cash mixer program in August. In response to OFAC’s decision, Flashbots, an Ethereum research and development company, revealed some important updates.
The company stated it would begin censoring transactions using a critical piece of infrastructure that validators serving Ethereum’s POS network relied on. The resulting effect was OFAC-compliant blocks.
The current status of MEVs
Information from mevwatch.io showed that in September, the share of OFAC compliant blocks began rising sharp and eventually became the most dominant MEV. In November, conforming blocks hit a high of 79%, while non-conforming blocks hit 11% and 10%, respectively.
However, at the time of writing, the percentage of followers had dropped to 68%, with a total of 57% compliant blocks. This progress has been made thanks to the consistent efforts of all players, especially Flashbots.
By rejecting payments with a maximum extractable value (MEV) of less than 0.05 ETH, validators can reduce OFAC compliance by 35%, according to research issued by Flashbots in November and quoted by Messari. This decision would have a small impact on their earnings.
Strikers rise anyway
ETH strikers remained active in their activities despite concerns over the compliance blocs. The value had increased, as evidenced by CryptoQuant’s Total Value Staked stats.
According to the data, as of December 15, more than $15 million was at stake. This meant that despite concerns about compliance and the centralization of ETH validators, more ETH was being deployed.
ETH stands for decline
A daily period chart of Ethereum (ETH) revealed that it had lost about 7% of its value in the past 48 hours. The FOMC report released on December 14 may also have contributed to the price drop.
The short and long moving averages (the yellow and blue lines) appeared to act as resistance. The yellow line formed the resistance level at $1,300, while the blue line did the same around $1,500.
According to the relative strength index, which was below 50, ETH’s overall trend was bearish. Since it had already reached the high volume node zone, the Visible Range Volume Profile metric also suggested there was a chance of a further decline. ETH was worth around $1,200 at the time of writing.
The efforts of the Ethereum community to make the platform censorship-resistant and neutral are paying off. This change may gradually reduce the number of compatible blocks.
This post Ethereum OFAC compliant blocks will drop as validators affect this update
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