Yes and Yes,,,,mostly the later.
So its says the higher the compression the less knock you SHOULD encounter, also in another article i read the richer you have e85 the less Knock you Should encounter allowing you to run more timing. Thoughts/Comments?? Thats what i got outta this paper and the statment below is not my words
ethanol (and methanol) has a very high latent heat evaporation rate,
this means as the ethanol is made into tiny droplets ,
the methanol basically sucks the heat out of the air.
This drops the intake temp like a prom dress.
This process helps prevent detonation, therefore you can use
more timing, compression, etc to build more cylinder
pressure, hence more horsepower (actually more torque).
It is kinda involved, but that should give you an idea.