The Ethereum Blockchain Experiences Surge in Validator Withdrawals
The Ethereum blockchain is witnessing a significant increase in the number of validators queuing up to withdraw their staked ether. According to data from ValidatorQueue, the exit queue has reached 16,000, representing over 510,000 ether ($1.1 billion) in total. Each validator can stake a maximum of 32 ether.
Celsius Contributes to the Heightened Validator Exit Queue
Celsius, which is undergoing restructuring after filing for bankruptcy protection last year, has announced its plans to cancel its stake in the Ethereum network and distribute assets to its creditors. Celsius’ withdrawal request of more than 200,000 ETH ($450 million) has contributed to the increased validator exit queue. Additionally, 54% (350,000 ETH) of the validators waiting to be withdrawn are associated with staking provider Figment.
Potential Overlap Between Figment and Celsius Withdrawals
There is speculation that some of the withdrawals tagged as Figment may actually belong to Celsius. Analyst Tom Wan suggests that when Celsius redeemed 428k stETH from Lido in June, it restaked 197k ETH via Figment. However, Nansen clarified that not all of Figment’s withdrawals can be attributed to Celsius.
Staking Yield and Entry Queue Status
Despite the surge in validator withdrawals, the entry queue for new validators remains close to zero. The time required to complete both the exit and entry queues depends on the churn limit of 13 validators per epoch or a daily cap of 2,925 validators entering or exiting the network. The current staking yield for Ethereum validators is approximately 3.4%, a decrease from the previous rate of nearly 8% recorded in May 2023.
Hot Take: Ethereum Validators Rush to Withdraw Staked Ether as Exit Queue Surges
The Ethereum blockchain is experiencing a significant influx of validators seeking to withdraw their staked ether, resulting in a massive exit queue. The withdrawal requests, including those from Celsius and Figment, have led to over 16,000 validators waiting to reclaim their funds. While the entry queue for new validators remains low, the processing time for completing the exit queue is expected to be around five days, with a total withdrawal length of over 14 days. This surge in validator withdrawals reflects the growing importance of staking rewards and the need for efficient systems to handle increased demand.
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