Friday, December 9, 2022
 

Crypto Twitter Disagrees on How to Deal with Transaction Censoring

  • One of the possible propositions in response to the threat of transaction censorship on Ethereum is Social slashing.
  • The Ethereum community disagrees with this model.
  • In social slashing, validators that incorrectly validate incoming transactions or otherwise behave dishonestly have a portion of their stake reduced.

In the aftermath of the US government’s sanctions on addresses associated with Tornado Cash, there has been disagreement among the Ethereum community over how to effectively manage the potential of protocol-level transaction censorship.

Last week, the community proposed social slashing or a user-activated soft fork (UASF) as potential solutions to transaction-level censorship on Ethereum. While some criticized the proposals as “traps” that would cause more harm than good, others argued that they were necessary.

In a 21-paragraph tweet on August 22, Justin Bons, the founder of Cyber Capital, argued that slashing “represents a greater danger than the OFAC legislation” and that it will not be a viable solution to combat protocol-level censorship.

Bons added that the tactic might cause a chain split, with some validators processing transactions on the censorship-free chain and the others only verifying the OFAC-compliant chain.

In social slashing, validators that incorrectly validate incoming transactions or otherwise behave dishonestly have a portion of their stake reduced.

The contentious discussion started after Ethermine decided not to process transactions from the now-sanctioned Ethereum-based privacy tool, Tornado Cash. This decision caused some members of the Ethereum community to be concerned about what might happen if other centralized validators made a similar decision.

In related events, Vitalik Buterin, a co-founder of Ethereum, voted for the option to burn the stakes of crypto service providers that would agree to censor the Ethereum protocol. Buterin made the position in a Twitter poll last week by blogger Eric Wall where he asked the Ethereum community what their choice would be if regulators asked validators to censor a decentralized protocol.

  • One of the possible propositions in response to the threat of transaction censorship on Ethereum is Social slashing.
  • The Ethereum community disagrees with this model.
  • In social slashing, validators that incorrectly validate incoming transactions or otherwise behave dishonestly have a portion of their stake reduced.

In the aftermath of the US government’s sanctions on addresses associated with Tornado Cash, there has been disagreement among the Ethereum community over how to effectively manage the potential of protocol-level transaction censorship.

Last week, the community proposed social slashing or a user-activated soft fork (UASF) as potential solutions to transaction-level censorship on Ethereum. While some criticized the proposals as “traps” that would cause more harm than good, others argued that they were necessary.

In a 21-paragraph tweet on August 22, Justin Bons, the founder of Cyber Capital, argued that slashing “represents a greater danger than the OFAC legislation” and that it will not be a viable solution to combat protocol-level censorship.

Bons added that the tactic might cause a chain split, with some validators processing transactions on the censorship-free chain and the others only verifying the OFAC-compliant chain.

In social slashing, validators that incorrectly validate incoming transactions or otherwise behave dishonestly have a portion of their stake reduced.

The contentious discussion started after Ethermine decided not to process transactions from the now-sanctioned Ethereum-based privacy tool, Tornado Cash. This decision caused some members of the Ethereum community to be concerned about what might happen if other centralized validators made a similar decision.

In related events, Vitalik Buterin, a co-founder of Ethereum, voted for the option to burn the stakes of crypto service providers that would agree to censor the Ethereum protocol. Buterin made the position in a Twitter poll last week by blogger Eric Wall where he asked the Ethereum community what their choice would be if regulators asked validators to censor a decentralized protocol.

 

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