Celsius Initiates ETH Unstaking Plans
The bankrupt crypto lending platform Celsius has started shifting assets to ensure sufficient liquidity for potential asset distributions. In a recent statement, Celsius confirmed that a significant unstaking activity would take place in the next few days to unlock Ethereum for timely distributions to creditors. This move is positive news for customers who have been waiting for the return of their funds after 18 months of uncertainty. The Ethereum freed from this unstaking operation will not only be used to repay creditors but also to offset costs incurred during the restructuring process.
Celsius Accounts for One-Third of Pending ETH Withdrawals
Data from blockchain analytics organization Nansen reveals that approximately 32% of the Ethereum currently in the pending withdrawal queue belongs to Celsius. This amounts to 206,300 ETH, valued at around $467 million. With nearly one-third of the pending withdrawals tied to Celsius, the spike in validator exit queues could be attributed to the crypto lender’s actions.
Spike in Validator Exit Queue and Wait Time
Prior to the massive validator exit queue being cleared, Nansen data shows that 19,906 validators were awaiting a complete exit. In addition, there were 637,564 ETH stakings waiting for a full exit. On January 5, 2024, a total of 16,425 validators exited their staked ETH positions, leading to an all-time high in the validator exit queue on Beacon Chain. The wait time for clearing the queue reached 5 days. This spike comes a month after a peak in the ETH validator queue in December.
Hot Take: Celsius’ Unstaking Impacts Ethereum Validator Exit Queue
The recent surge in Ethereum validator exit queues can be attributed to Celsius’ plans of unstaking ETH. As Celsius strategically shifts its assets to ensure liquidity for potential asset distributions, it has initiated a significant unstaking activity. While this move benefits customers awaiting the return of their funds, it also impacts the Ethereum network. With Celsius accounting for one-third of the pending ETH withdrawals, the spike in validator exits and increased wait time highlight the ripple effects of Celsius’ actions on the validator community. This situation underscores the interdependence between lending platforms and the broader crypto ecosystem.
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