Ethereum co-founder Vitalic Buterinestated that it would interpret this move as an attack on Ethereum if censorship is enforced by regulators. He explained that through social consensus, staking providers vote in favor of burning their ETH shares if they approve and censor transactions with Ethereum protocol-level validators.
Buterin Against Ethereum Censorship!
Ethereum Co-founder Vitalik Buterin announced in a tweet on Aug. 16 that he participated in the “Consider censorship an attack on Ethereum and burn stakes through social consensus” poll on a Twitter by Eric Wall.
Crypto mixer by Office of Foreign Assets Control (OFAC) Tornado CashIts enforcement or enforced censorship is a development that raises concerns about the potential censorship of Ethereum after the Ethereum Merge. Compounding things was that Dune data revealed that over 66% of Beacon chain validators were likely to comply with OFAC.
Majority of its providers such as Lido, Coinbase, Kraken Exchange, Staked, and Bitcoin Suisse are likely to agree to comply with OFAC regulations and censorship at the Ethereum protocol level with validators. In such a scenario, will the Ethereum community “Consider censorship an attack on Ethereum and burn their shares through social consensus” or “Tolerate censorship”?” question began to be asked.
In fact, many already thought that after Ethereum’s transition to proof-of-stake (PoS), it was more prone to censorship or enforced regulatory attacks by regulators. Fortunately, 62% of users believe it’s best for providers to burn their ETH shares if they choose to censor transactions. Ethereum co-founder Vitalik Buterin is also on the side of supporting burning stakes.
Also, many are considering removing Ethereum tokens from centralized exchanges as these exchanges will likely continue to comply with regulations. Community reactions to such bans by regulators are critical to bolstering the underlying concept of “cryptocurrency”.
Censorship May Affect DeFi System Badly
DeFi protocols such as Circle, Aave, Uniswap, Balancer, dYdX, Alchemy and Infura have already started to block addresses associated with Tornado Cash and addresses approved by OFAC.
Mandatory enforcement by governments and regulators against open source technology and its developers is seen as a potential risk to the DeFi system and the concept of “decentralization”. All DeFi assets, including stablecoins, smart contracts, DAO, protocols or company, may be at high risk.
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Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.