# The Fight for DEXes Begins Now Source: https://x.com/thedesertlynx/status/2116952653007905081?a=lYBm_DZ9TkzvHOiOeUQ&s=46 Kiwi News: https://news.kiwistand.com/stories/The-Fight-for-DEXes-Begins-Now?index=0x6ae8814270c54e35baf97fd2d93558b26e48a9919a62e92d5d13b75be30df493a149d76f Submitted by misha on 2026-11-02 UTC, 2 upvotes, 0 comments ## Summary The FBI has called on THORChain node operators to help censor transactions tied to the latest Binance hack, and the author argues that permissionless DEXes now face a decisive test. The author argues that DEXes did not facilitate the theft and that targeting them makes little sense. The article says THORChain has fewer than 120 nodes, goes down often, and has a market value of about $200m, while its sister project Maya Protocol is less vulnerable because it is not US-based. ## Article The FBI officially called on THORChain node operators to help with censoring transactions related to the latest Binance hack. We've entered the era where governments are more publicly pressuring decentralized protocols to censor. It's a now-or-never moment for permissionless finance. DISCLAIMER! I'm talking academically about protocols here, but real people run them and real people can go to real prison. I am NOT encouraging anyone to put their own safety and freedom at risk. Take care of yourself and your family first! Should DEXes Be Responsible for Hacks? This entire situation arose because hackers (in particular attributed to the DPRK) stole funds, then used DEXes to convert to other assets they'd rather have. DEXes have NOT facilitated the theft or transfer of funds. Poor CEX security practices, law enforcement/government incompetence, and the underlying blockchains themselves have allowed for all this. Targeting DEXes doesn't make sense. Sometimes eloquence isn't the best way to approach this, so if you would prefer a swearing-riddled rant instead, give this a watch. The Line in the Sand: Censor or Don't So far, almost all the cross-chain decentralized exchange protocols have implemented some kind of transaction blocking for stolen funds at least, NEAR Intents and Chainflip being the major ones. THORChain, and its sister DEX the Maya Protocol, are the ones that don't. THORChain and Maya are the last ones preventing consensus from forming around transaction censorship being necessary and accepted. This is the line in the sand. If this line isn't held, then we'll probably have to accept the reality that, while we may be able to achieve permissionless money, access to that permissionless money isn't going to be easy without going through controlled channels. That puts a serious limitation on just how free freedom money can be. Industry pressure hasn't been enough to get THORChain and Maya to bend the knee. Now government has put them on notice. While not guaranteed, it's reasonable to assume that actual law enforcement action is on the horizon: website/GitHub takedowns, hosting cancellations, and arrests of node operators. Tornado Cash's Case We have one good example of the US government explicitly going after a major cryptocurrency tool of this category: Tornado Cash. Tornado Cash was/is a smart contract on Ethereum giving privacy to anyone who used it. The contract and its addresses were sanctioned, its developers were arrested, but the contract, being immutable, stayed up. People kept using it. We can expect the same outcome for an attack on THORChain, except for a couple of differences. Tornado Cash operated actual interfaces THORChain's founders explicitly shied away from operating the actual websites users would use to make swaps in a clear "separation of powers" move that Tornado Cash didn't do. Therefore, the "we just write open source code" defense is much stronger in the THORChain case. However, recently THORChain has deployed its own interface for swaps. This complicates things. I don't know fully what kind of separation exists between this and the developers of the code, but these facts will matter if any court cases materialize out of this. Tornado Cash didn't have nodes to shut down This is key: Tornado Cash runs as an immutable smart contract on Ethereum. There's no way to take it down other than through some pretty massive coordination from Ethereum validators, which are scattered across the globe in many different jurisdictions, and which form a well-established and powerful network. THORChain itself has nodes. There's no need to compromise a major chain like Bitcoin or Ethereum in order to stop it. Easiest Censorship Vector: The 10% Rule I recently interviewed Alex Shevchenko of NEAR Intents on this very subject of transaction censorship in DEXes. One of the parting thoughts on the discussion was the 10% rule: the ability of a protocol to survive and remain legitimate depends on the ratio of legitimate vs. illegitimate activity. If 90% of volume on THORChain is legitimate, it's easy for it to thrive despite 10% of activity coming from hacks and thefts. But if that ratio tips too far in the favor of illegitimate/criminal transactions, it's easy to economically corner THORChain and blacklist it as a criminal-only enterprise. If THORChain lands on an island and legitimate users fear to use it, then it essentially has failed, even though it continues to operate. If this happens, then even a user at risk of being censored will weigh their risk: is it riskier to use NEAR Intents and have their swap flagged by SHIELD and frozen, or is it riskier to use THORChain and successfully swap, but have funds tainted and unusable forever? So the FBI doesn't have to actually bring the THORChain network down. They just have to blacklist it, and it may die out on its own. Is THORChain Ready? Now that the government is at the gates, we have to ask ourselves: is THORChain ready to fight off the world's most powerful government? Short answer from me: I don't know. Possibly, possibly not. I'm uneasy at this prospect at the moment, to be perfectly honest, for two big reasons. It's a small project with few nodes Blockchains like Bitcoin and Ethereum, potentially Solana, maybe more established ones like Dash, Monero, Zcash, Bitcoin Cash, or Litecoin may be large enough to remain online and operational in the case of a government attack. THORChain has fewer than 120 nodes, has nowhere near the history of resilience of the aforementioned projects, and in recent memory came close to the brink of extinction. Surviving the biggest pressures imaginable as a relatively new ~$200m project is a tall order, especially when there are many DEX competitors and NEAR Intents in particular has larger market share. It can't keep consistent uptime This is the elephant in the room that it pains me to point out: THORChain goes down all the time. Downtime is downtime, whether it comes from government censorship or purely engineering challenges. It may be that the FBI never has to flex its muscle, and the network just never maintains consistent enough uptime to be a threat to any power. What's more, poor uptime affects that magical 10% ratio I mentioned earlier. If legitimate users experience downtime, they go elsewhere, and may not come back. Illegitimate users don't have the choice. Over time, downtime ensures that a higher percentage of volume on THORChain comes from criminal elements. In my opinion, if THORChain does happen to fail, this will be the reason, not explicit censorship. What Happens If THORChain Fails? Are we completely cooked if THORChain fails here? Short answer: things get much, much harder, but no, not fully. Maya Protocol THORChain's sister project the Maya Protocol still persists. Most of the same structural limitations remain, but the team is much less vulnerable: not US-based and with fewer formalized legal structures to assail. If THORChain couldn't continue, I'd expect Maya to keep on going, with much of the THORChain community simply moving over and focusing development efforts there. It would be a blow, but we could continue. Peer-to-Peer The most censorship-resistant way to do anything is peer-to-peer. THORChain is a very complex automated machine with unified liquidity, processing trades on-demand from a unified network. It's a very big target for censorship, to be frank. When traders and liquidity are fully peer-to-peer, however, things get a lot easier to keep going. You would need to crush every single individual trader everywhere in the world, which simply isn't feasible. Atomic swap DEXes operate this way, and are much more resilient against censorship. However, their user experience is just so bad that they haven't gotten meaningful enough volume to be a threat to anyone. If a smooth, streamlined, intents-based architecture can be deployed to match different peer-to-peer traders with each other (rather than vetted market makers like NEAR Intents does), and this can be achieved with a good user experience, this is the ultimate censorship resistant angle. Rather than unified liquidity, swappers in vulnerable jurisdictions can choose to not do business with tainted funds, but others with more robust anonymity and security practices and more favorable jurisdictions can remain open for business. If someone isn't building this setup, they should. We proved that decentralized money could remain uncensorable. We proved that using it privately could be done as well. Now trades are on the chopping block. Do we have the fortitude to make it through?