MEV is the maximum value that can be extracted from mining a block by shuffling transactions within it. In the Ethereum blockchain after the move to PoS, MEV is made possible by MEV Boost, which is an open-source middleware mechanism that helps collect transactions and offer blocks, passing them on to validators. Flashbots supports one of the most popular nodes on MEV Boost. This relay tells validators which transactions they must prioritise when adding blocks in order to receive additional rewards.

Previously, MEV stood for Miner Extractable Value. In this case, it referred to the ability of miners to earn additional income by rearranging the transactions in a mined block in a certain way, which they are perfectly capable of doing. Now there are no miners on the Etherium network, as they have been replaced by validators. Because of this, MEV now stands for “maximum extractable value”.

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The logic behind extracting additional value is simple. Imagine a trader sees a large sale or purchase of a particular cryptocurrency, whose transaction ends up in the queue to be added. If he places his trade before that transaction, it allows him to get ahead of market developments and benefit from that – by opening a short or long position, for example. The market then moves in the right direction and the trader makes money on the move.

The key feature in this case is that the transaction is added to the block before another serious transaction that is able to affect the market. Naturally, such a user would be willing to pay a large fee to bypass the queue and ask the validators to rearrange the transactions accordingly.


Now, experts have noticed that such platforms ignore transactions related to the cryptocurrency mixer Tornado Cash, which became the target of US government sanctions in the first half of August 2022 due to its use as a money laundering tool. And that means such transactions have validation and conduction issues, which essentially means censorship.


The problem of censorship in blockchain

Labrys created a special service, MEV Watch, to monitor transaction flows in Etherium after the merger. Approximately 25 per cent of the blocks created since the merger have already passed through the MEV Boost nodes, which are monitored by the US Office of Foreign Assets Control (OFAC).

The point is that the Flashbots platform complies with the regulatory requirements because it does not want to violate imposed sanctions or established laws. However, as one might guess, this leads to censorship, that is, the inability to transact with the platform under sanctions.

Labrys representatives have expressed concern about the growing trend of censorship in blockchain. Here is the relevant rejoinder from the experts.

What is worrying is how quickly the potential for censorship has grown unchecked since the merger. Things could get much worse as more validators join the MEV Boost, unless a separate campaign is launched against it.

Flashbots is likely to censor transactions by default as it seeks to comply with regulatory requirements. This is also hinted at by a comment published back in August by one of the platform’s executives, nicknamed Hasu, that Flashbots plans to filter transactions hit by sanctions.

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While Flashbots alone accounts for almost a quarter of Ether’s post-merger blocks, it’s possible that censorship could be much more widespread, says The Block analyst Stephen Zheng. Here’s his view.

Currently, this data only shows those validators who use MEV Boost. However, those that do not, may also be acting to the regulator’s advantage through their own internal systems.

According to statistics, Flashbots is the only MEV node involved in transaction censorship. Meanwhile, Blocknative, Eden Network, Bloxroute and Manifold operators are still processing blocks with transactions from the Tornado Cash platform. This contradicts their management’s claims that they are complying with sanctions.


We believe that such a situation is unlikely to benefit the reputation of Etherium. And while the phenomenon is not widespread yet, the mere fact that there is censorship of certain transactions is already a cause for concern. Yet the value of cryptocurrencies and blockchains in general is primarily in decentralisation, i.e., independence from various authorities and agencies. In this case, companies do not want to confront the authorities, so they are forced to act as follows. Hopefully, the situation will change for the better over time.