Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
On-chain analyst Willy Woo has tweeted that he believes Ethereum to already be under control of the U.S. government, claiming that dApps built on the second largest blockchain are not decentralized at all and that transactions on Ethereum are not resistant to censorship.
In his tweet, Woo included a screenshot from inclusion.watch and stated that 69% of Ethereum blocks are already compliant with OFAC (it has only been three months after the Merge upgrade was introduced in September).
Is this right? Only 3 months after ETH goes PoS, 69% of blocks are OFAC compliant?
— Willy Woo (@woonomic) December 23, 2022
Meaning Ethereum is already under control by the US government.
This means all DeFi apps running on ETH are not decentralised finance. And transactions are not censorship resistant. pic.twitter.com/VqNWuTXepn
OFAC is the Office of Foreign Assets Control, the entity that enforces United States economic sanctions. In October, the percentage of blocks compliant with OFAC suddenly went up from 9% to 51%. This compliance is to do with MEV-Boost relays, to which the production of ETH blocks is outsourced.
Ethereum blocks went from 9% OFAC compliant to 51% OFAC compliant in the past month, as mev boost (block outsourcing) takes market share. https://t.co/SYiVHPlTf4
— Lyn Alden (@LynAldenContact) October 14, 2022
There have also been other concerns in the crypto community about Ethereum becoming centralized. The first one is that around 52% of Ethereum nodes are hosted by Amazon Web Services (AWS), a heavyweight infrastructure provider.
Yuri MolchanThe second one is that after Merge was implemented, only two entities have been in control of around 50% of the Ethereum network — Lido and Coinbase. This is where nearly 50% of all staked ETH has been held — 30.24% and 14.44%, correspondingly.
However, good news about this is that Lido is a DAO (Decentralized Autonomous Organization), so it allows anyone to join it to become part of the largest entity on Ethereum.
Godfrey Benjamin
Denys Serhiichuk
Vladislav Sopov
Dan Burgin