Surge in Exits: Ethereum Network Sees Record High of 16,000 Validators in Queue
The Ethereum network is experiencing a surge in validator exits, with on-chain data revealing a record high of over 16,000 validators in the exit queue on January 5th. This increase in exits has resulted in a significant wait time for unstaking, with an average of 5.6 days. Currently, there are still around 15,140 validators waiting in the queue, according to the latest data.
Wait Time for Unstaking Spikes to 5.6 Days as Validators Exit Ethereum Network
As the number of validators exiting the Ethereum network continues to rise, the wait time for unstaking has significantly spiked. On average, validators now face a wait of 5.6 days. This delay is due to the large number of validators in the exit queue, with over 16,000 individuals seeking to exit the network. The extended wait time raises concerns about the network’s ability to handle such a large-scale exodus.
Defunct Celsius Network and Figment Drive Majority of Ethereum Validator Exits
The surge in validator exits can be primarily attributed to withdrawal requests from defunct CeFi lender Celsius Network and staking provider Figment. Together, these entities account for approximately 75% of the total withdrawals in the exit queue. Celsius Network, currently undergoing a restructuring process after declaring bankruptcy, is initiating a significant withdrawal from Ethereum staking to fulfill creditors’ demands. This withdrawal involves over 200,000 ETH, valued at around $450 million. Additionally, Figment is responsible for 54% (350,000 ETH) of the total withdrawals in the queue.
Celsius Network to Withdraw 200,000 ETH, Figment Plans to Withdraw 350,000 ETH
The withdrawal requests from Celsius Network and Figment are poised to remove approximately 550,000 staked Ethereum from the network. This accounts for roughly 1.7% of the 29 million ETH staked across all platforms. Celsius Network aims to withdraw over 200,000 ETH, while Figment plans to withdraw around 350,000 ETH. These substantial withdrawals pose challenges for the Ethereum network’s stability, as validators play a crucial role in securing and processing transactions.
Entry Queue for New Ethereum Validators Remains Low as Exit Queue Grows
In contrast to the significant increase in validators exiting the Ethereum network, the entry queue for new validators remains notably low, hovering near zero. This means that while validators are leaving the network in large numbers, there are very few new validators looking to join. The Ethereum network has a churn limit, which restricts the number of validators that can enter or exit the network per day to 2,925 based on 13 validators per epoch. The lack of new entries further emphasizes the ongoing exodus of validators.
Conclusion
The Ethereum network is currently witnessing a surge in validator exits, leading to an overcrowded exit queue and an extended wait time for unstaking. The majority of these exits are driven by withdrawal requests from Celsius Network and Figment, two major players in the staking sector. As they aim to withdraw a substantial amount of staked Ethereum, concerns arise regarding the network’s stability and its ability to handle large-scale exits. Additionally, the lack of new validators entering the network further highlights the ongoing challenges faced by the Ethereum network.
Analyst comment
Negative news: The surge in validator exits and extended wait time for unstaking raises concerns about the network’s ability to handle large-scale exits. The withdrawal requests from Celsius Network and Figment pose challenges for the Ethereum network’s stability. The lack of new validators entering the network adds to ongoing challenges. The market may experience increased volatility and uncertainty due to these developments.
