Given the Sanctions on Tornado Cash, Is Ethereum Censorship Resistant? - Ep. 390

Show highlights:

the legal meaning of the OFAC sanctions on Tornado Cash and why it is causing complications

how legislation is built for the fiat world, and how in DeFi and crypto there’s no clarity 

how miners have changed their behavior prior to the Merge

whether a proof of work chain or a proof of stake chain would be more censorship resistant

whether laws apply to validators in a PoS chain

the ways in which the government could provide more clarification 

the different entities involved in Proof of Stake

the liabilities for each entity in PoS and what secondary liability is

how the task of the bidder can be described as a mathematical optimization problem

whether Lido is exposed to US regulations

how long would it take for a large staker like Coinbase to stop being a validator

how a user-activated soft fork works and the conditions in which a fork could happen

whether social slashing is enforceable considering it is not in the protocol

the likelihood of Ethereum becoming a permissioned system

the role of Flashbots’ relay code and what it means for Ethereum’s censorship resistance

how DeFi’s exposure to US-based institutions can affect the likelihood of the chain complying with sanctions

whether DAI is just wrapped USDC

how MakerDAO is trying to be more independent of USDC

why US-based companies will choose a conservative path, considering the lack of guidance

the importance of educating the regulators 

how cash and crypto are the only remaining private payment methods 

Thank you to our sponsors!
 
Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021
Ava Labs: https://avax.network
a16z: https://link.chtbl.com/HObAJQDL?sid=unchained
 
Andrew
Twitter: https://twitter.com/propelforward
 
Martin
Twitter: https://twitter.com/koeppelmann
 
Previous Coverage of the Tornado Cash Sanctions on Unchained:

Is TRM Labs Blocking Addresses From DeFi Protocols? Ari Redbord Says No: https://unchainedpodcast.com/is-trm-labs-blocking-addresses-from-defi-protocols-ari-redbord-says-no-ep-387/

Tornado Cash Sanctioned. Did the Government Overstep Its Bounds?: https://unchainedpodcast.com/tornado-cash-sanctioned-did-the-government-overstep-its-bounds-ep-384/

The Chopping Block: Did OFAC Overstep by Sanctioning Tornado Cash?: https://unchainedpodcast.com/the-chopping-block-did-ofac-overstep-by-sanctioning-tornado-cash-ep-386/

 
 
Social Slashing and Censorship on ETH
Axios summary of the situation: https://www.axios.com/2022/08/23/how-transactions-might-be-censored-after-ethereum-changes-next-month
BitMex research on how the sanctions affect Ethereum: https://blog.bitmex.com/ofac-sanctions-ethereum-pos-some-technical-nuances/
Ethermine banning transactions: https://twitter.com/takenstheorem/status/1560690035955011585?s=20&t=59hWdhr8_O-hYA8uYnZJ8w
Nic Carter’s article: https://www.coindesk.com/layer2/2022/08/25/if-ethereum-starts-slashing-it-burns/
Eric Wall’s article on social slashing: https://ercwl.medium.com/the-case-for-social-slashing-59277ff4d9c7
CoinDesk article: https://www.coindesk.com/tech/2022/08/23/as-censorship-on-ethereum-begins-could-this-open-sourced-code-help-counter-it/?outputType=amp
Hetzner banning Ethereum users: https://twitter.com/koeppelmann/status/1563146729314467840?s=20&t=ubFhCQqrQyHKfflgMHEmJw
 

Learn more about your ad choices. Visit megaphone.fm/adchoices