The Tornado Cash affair continues to cause tremors, and the question of real decentralization arises more than ever. Vitalik Buterin, the co-founder of Ethereum (ETH), has indicated that he wants to burn the Ethers of depositors on the Beacon Chain who come to comply with the requirements of regulators such as OFAC.

The issue of Ethereum censorship

The recent banning of the Tornado Cash cryptocurrency mixer by the Office of Foreign Assets Control (OFAC) raises a lot of questions within the cryptocurrency ecosystem, and censorship does not seem to be in vogue for everyone. world.

On Twitter, Lefteris Karapetsas, the founder of portfolio tracker Rotki, interviewed 5 top Beacon Chain depositors asking what they would do if a regulator ordered them to censor certain transactions on Ethereum.

For information, the Beacon Chain ensures the functioning of the proof of stake (PoS) and will join the Ethereum mainnet during the Merge update scheduled around September 15, 2022.

Question for @LidoFinance, @coinbase, @krakenfx, @stakedus, @BitcoinSuisseAG

If regulators ask you to censor at the #ethereum protocol level with your validators will you:

A) Comply and censor at protocol level
B) Shut down the staking service and preserve network integrity https://t.co/UYVR2L6tB1

— Lefteris Karapetsas | Hiring for @rotkiapp (@LefterisJP) August 14, 2022

This tweet in question was itself in response to a tweet from @TheEylon, which noted that currently, 66% of Beacon Chain depositors were entities likely to comply with possible sanctions from OFAC or an organism of the same order.

Note that Lido owns 31% of the ETH deposited on the Beacon Chain with more than 129,000 validators, followed by Kraken with 1.2 million ETH deposited, and finally Staked.us with 396,000 ETH deposited.

Vitalik wishes to preserve the network

In turn, Eric Wall wondered about the potential for censorship on the Ethereum network by offering a poll to find out if the Ethereum community would adhere to a possible form of censorship from the entities previously stated, or if they preferred to burn their staked Ethers, effectively considering censorship as a form of attack on the blockchain.

Currently, the poll in question has more than 61% of votes in favor of a burn of staked Ethers, 9% of votes against it, and 30% of neutrals. Vitalik Buterin, the co-founder of Ethereum, also contributed his voice:

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 | OP_😺 (@ercwl) August 15, 2022

Vitalik Buterin is thus in favor of the burning of ETH staked by any validator who would like to comply with the requirements of the regulators. Note that by doing this, the latter would thus opt for a selection of the blocks to be validated, which could lead to disturbances.

Although this is only a response to a tweet, it seems obvious that this problem needs to be resolved quickly not only for Ethereum but also for all services presenting themselves as decentralized.

This echoes in particular the recent decision by Circle, which decided to freeze several wallets that had interacted with the Tornado Cash protocol, which had led the founder of MakerDAO to question the collateralization of the DAI, which is largely provided by the ‘USDC.