Ethereum community proposes soft fork to counter OFAC sanctions
Vitalik Buterin endorsed a hypothetical option to burn the stake of major Ethereum validators who would agree to comply with OFAC sanctions at the protocol level. However, the community included others who supported censorship.
I can’t believe how vacant the response from the Ethereum community has been on this. Wasn’t the plan always to slash censoring attackers? Or make them bleed out to 0 by freezing their stake? pic.twitter.com/iDBgB2K3jg
— Eric Wall X ? (@ercwl) August 15, 2022
«Разве план не заключался в том, чтобы сократить количество атакующих цензоров? Или заставить их истечь кровью до нуля, заморозив их стейкинговый депозит?», — посетовал пользователь Eric Wall X.
The proposer of the initiative created a poll in response to a call by Rotkiapp founder Lefteris Karapetas to the largest staking pools such as Lido Finance, Coinbase and Kraken.
He proposed that they clarify their position regarding compliance with OFAC sanctions [in light of recent events around Tornado Cash]. events around Tornado Cash. Organizations urged them to say whether they were willing to refrain from censorship and to drop business to preserve network integrity.
Buterin reminded Eric Wall X that in Proof-of-Stake there is an option for a soft fork activated by a minority of users (UASF) in the form of a so-called “social consensus”. For this, the consent of one-third of the assets locked in staking is required. In Ethereum this is implemented via the inactivity leak mechanism.
Developer nick.eth doubted the viability of such a soft fork. He explained that this was due to the high correlation between users and validators, which would lead to insufficient support for unpopular decisions.
Is it so different now just because OFAC is enforcing the censorship? That the censorship is ”legal”?
This kind of weak-spined, limp-dick (sorry Nick, you’re great) rhetoric is why I still have my reservations about the Ethereum community. pic.twitter.com/8YagokrYWU
— Eric Wall X ? (@ercwl) August 15, 2022
Eric Wall X strongly disagreed with this statement.
«Устойчивость к цензуре не является свойством протокола, это свойство сообщества», — подчеркнул он.
The user urged the largest validators not to comply with OFAC. He forecast a staking slash for all clients and the dissolution of their businesses if organisations chose otherwise. Eric Wall X acknowledged that at this stage this is technically impossible.
In conclusion, an Ethereum maximalist appealed to the Bitcoin community, lamenting that in 2017 they did not stand up for the values properly to support SegWit2x.
«Почему это так безумно, что Ethereum столкнется с подобными битвами, которые также требуют противодействия сообщества?», — задался вопросом он.
The developer LukeYoungblood, who helped build Coinbase’s staking service, stressed that the Bitcoin exchange would abandon the product to avoid violating one of the principles of cryptography — censorship-resistance. According to journalist Colin Wu, Coinbase’s Ethereum validators operate outside the United States (for tax purposes), which would complicate attempts by U.S. regulators to enforce sanctions.
Former coinbase eth staking builder: all of Coinbase retail Ethereum validators operate outside the US (for tax purposes). So not only will they fight censorship to their last, dying breath, it is a stretch for US regulators to censor transactions. https://t.co/fH59xhehM6
— Wu Blockchain (@WuBlockchain) August 16, 2022
As noted in late July, Chinese miner Chandler Guo proposed a fork with an Ethereum branch that would continue to operate on the Proof-of-Work algorithm. The ETHPoW asset that emerged would allow miners of the second-largest cryptocurrency by market capitalization to continue operating after the merge.
Earlier, supporters of the PoW fork called it “inevitable.”
Experts at CoinShares were skeptical about the prospects for ETHPoW and deemed it “unviable”.
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