<img src="https://cryptoslate.com/wp-content/uploads/2024/01/ethereum-queue.jpg” />
The ethereum network is witnessing a surge in validator exits, which reached a record of over 16,000 validators in the exit queue on January 5, on-chain. data presented.
The increase in departures has caused the waiting time to withdraw participation to skyrocket to an average of 5.6 days. Around 15,140 validators are still in the queue at press time.
The increase was mainly due to withdrawal requests from defunct lender CeFi Celsius Network and betting provider Figment, which together account for approximately 75% of the total withdrawals in the queue.
550k eth
Celsius, which is currently undergoing a restructuring process after filing for bankruptcy last year, has begun a large-scale withdrawal of its stake in ethereum.
The measure, intended to reallocate assets to meet creditor demands, involves the withdrawal of more than 200,000 eth, valued at approximately $450 million.
The situation is aggravated by the involvement of Figment, another major staking provider, which is linked to 54% (350,000 eth) of the total withdrawals in queue.
Together, the two entities want to withdraw approximately 550,000 staked ethereum, approximately 1.7% of the 29 million eth staked across all platforms.
Tickets are selling out
Amid these substantial outflows, the entry queue for new ethereum validators remains remarkably low, hovering near zero. This is in stark contrast to the growing number of people in the exit queue.
The ethereum network operates with 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 increase in exit requests also affected staking performance for ethereum validators. At press time, the staking rewards benchmark rate is approximately 3.4%, down more than 50% from the nearly 8% yield recorded in May 2023.
This significant change in validator dynamics poses potential challenges to the stability of the ethereum network, given the crucial role of validators in security and transaction processing.
Meanwhile, the lengthy wait time to withdraw staking, now at an average of 5.6 days, has raised concerns about the network's ability to handle large-scale exits.
