Ethereum community divided over transaction censorship solutions

Social slashing and even a user-activated soft fork have been suggested as possible responses to the threat of transaction censorship on Ethereum.

The Ethereum community is divided on how best to respond to the threat of protocol-level transaction censorship following US government sanctions on addresses tied to Tornado Cash.

Over the past week, members of the Ethereum community have offered social slashing or even a user-activated soft fork (UASF) as possible answers to transaction-level censorship on Ethereum, with some suggesting it. calling it a "trap" that will do more harm than good and others stating that there is a need to provide "credible neutrality and censorship resistance properties" on Ethereum.

The heated debate comes after Ethereum miner Ethermine opted not to process transactions from now US-sanctioned Ethereum-based privacy tool Tornado Cash, prompting members from the Ethereum community to worry about what would happen if other centralized validators did the same. .

The Ethereum community is also debating the effectiveness of social slashing to combat censorship on the Ethereum network, as the strategy could lead to chain splitting with some validators processing on-chain transactions without censorship and others only validating the OFAC-compliant chain.

Social slashing is the process by which validators see a percentage of their stake reduced if they do not properly validate incoming transactions or otherwise act dishonestly.

This can become a significant issue if regulators require large centralized staking services like Coinbase and other large centralized pools, which together hold more than 50% of Ether (