As possible solutions to the threat from transaction censorship on Ethereum, social slashing and even user-activated softforks have been suggested.
The Ethereum community is divided on how to respond to the threat from protocol-level transaction censorship following the United States government’s sanctions on Tornado Cash-linked addresses.
The Ethereum community has proposed social slashing and even a user-activated Soft Fork (UASF), as possible solutions to transaction-level censorship. Some call it a trap that does more harm than good, while others say it is necessary to provide “credible neutrity and censorship resistance” properties on Ethereum.
This heated debate arose after Ethereum miner Ethermine decided not to process transactions using the now U.S.-approved Ethereum-based privacy tool Tornado Cash. This has caused members of the Ethereum community concern about what might happen if other central validators made the same decision.
The Ethereum community is also discussing the effectiveness of social-slashing to fight censorship on Ethereum. This strategy could result in a split chain with some validators validating transactions on the OFAC-compliant blockchain and others processing transactions on the censorshipless chain.
Social slashing is the process whereby validators have a percentage of their ETH) in Ethereum Beacon 2.0 chain to validate OFAC-compliant chains.
Justin Bons , founder of Cyber Capital, argues that cutting “is a trap”, that “represents greater risk than the OFAC regulations” and that it will not be a viable option to combat censorship at protocol level.
Bons stated Monday in a 21-part Twitter thread that social slashing platforms may “deprive innocent user of their deposits,” which would violate their property rights.
Bons stated that not enough validators would comply with the law on Ethereum, which would lead to “a chain split”, at which point “censors will ignore or refuse to attest blocks containing OFAC violating TXs.”
Anthony Sassano, founder of the Ethereum podcast The Daily Gwei, wrote Saturday on Twitter that collateral damage in social slashing […] is inevitable and it’s worth doing to protect Ethereum’s credibility neutrality properties and censorship resistance properties.
Marius Van Der Wijgen, a Geth developer, shared the same sentiment and stated that the Ethereum community should give the highest priority to preserving censorship.
“If we allow censorship to user transactions on the network then we have basically failed.” This is the hill I’m willing and able to climb.”
“If we allow users to be censored by Ethereum, then this whole thing isn’t making sense. I will be leaving that ecosystem.” […] To me, censorship resistance should be the highest goal for Ethereum and the blockchain space as a whole. If we compromise on this, I believe there is no other way to go.” he said.
Eric Wall, crypto researcher, said that censorship resistance is a core property of the Ethereum network. He also stated that although we are seeing some censorship at the front end, it will only get worse if there is censorship happening alongside Ethereum.
Since Tornado Cash’s spark, the Ethereum community has been plagued by censorship problems for more than a week.