Ethereum infrastructure service Flashbots is currently being used to create 39% of Ethereum blocks, even though it continues to censor transactions from sanctioned crypto mixing service Tornado Cash.
Flashbots is a service that proposes blocks for validators running the Ethereum blockchain. It is widely used because it offers blocks that provide more value to validators. Yet, despite censorship and growing frustration from the Ethereum community, usage of Flashbots is only increasing.
According to Flashbots’ Transparency Dashboard, 39% of all Ethereum blocks are using Flashbots — including those proposed by other relays offering a similar service, or ones that haven't used a relay service. This is up from 12% on September 15.
The adoption of Flashbots has been rising because of its superior profitability. The service offers an average payout per block of 0.12 ETH ($147) to validators, compared to an average of 0.036 ETH ($44) from non-Flashbots blocks — a difference of 234%.
Currently, 47% of validators are registered with Flashbots, which means they are integrated with its service and are able to use it.
Not Going To Plan
While Flashbots offers a main relayer that censors transactions related to Tornado Cash, it has open-sourced its offering. It is possible to use alternative relayers that provide a similar service, though these do not necessarily offer the same rewards.
“To your other point we built mev-boost in such a way to maximize choice and competition: validators and users are empowered to choose which builders and relays they want to use,” emphasized Flashbots product lead Bert Miller, in response to criticisms of the service, on Twitter.
Yet, so far, this doesn’t appear to be the case. Flashbots usage continues to rise, and some prominent Ethereum community members have called on Flashbots to shut its main relayer down — which would force validators to choose other providers. “If FlashBots truly cared about a credibly neutral Ethereum, they would shut down their relaying service TODAY,” said well-known NFT investor DCinvestor on Twitter.
While Flashbots has been clear on its decision to censor transactions related to Tornado Cash, some believe it is an unnecessary move. In an opinion piece for CoinDesk, two lawyers at crypto venture capital firm Paradigm — the main capital partner for Flashbots — argue that those running blockchain services have misinterpreted the sanctions placed on Tornado Cash.
“But the most pernicious result of the OFAC sanctions is they have the potential to be misinterpreted by “base layer” participants – which includes validators and other actors such as builders, pool operators, relays, searchers and sequencers – as requiring the censorship of blocks involving sanctioned addresses,” the lawyers wrote, while noting that this is not the right way to interpret the law.
They added that the blockchain’s base layer — the part that generates blocks and processes transactions — isn’t required to censor blocks involved in sanctioned transactions, in the same way that the Simple Mail Transfer Protocol (SMTP) underlying email isn’t responsible for monitoring spam or illegal activity.
“To maintain its utility, crypto’s base layer must also maintain its neutrality and lack of bias,” they said.