Ethereum: Why it might take longer to withdraw your staked ETH
- The total time taken to fully exit and receive staked ETH surged over 13.5 days.
- The backlog was likely created by Celsius Network.
Waiting time for Ethereum [ETH] validators to withdraw their staked ETH shot up dramatically in the last 24 hours, reaching levels not seen since the option was made available following the Shapella Upgrade last year.
Unstaking queue gets crowded
As of this writing, a validator would have to wait for nearly five days to exit the network and become eligible for withdrawals, AMBCrypto’s analysis of validatorqueue.com dashboard revealed.
The waiting time surged due to an exponential jump in validators in the exit queue. Indeed, the backlog increased to over 16,766 on the 5th of January, compared to just 26 a day before.
Moreover, the total time taken to fully exit and receive the staked amount was more than 13.5 days, AMBCrypto discovered using data from rated.network.
As per the withdrawal mechanism, validators need to raise an exit request manually to be eligible for full withdrawals i.e, getting both initial deposits plus profits.
However, upon completion of the process, they lose the right to validate transactions on the Ethereum network.
Celsius slows down ETH unstaking operations
Apparently, the backlog was created as a result of bankrupt cryptocurrency lender Celsius Network’s plans of going ahead with its unstaking plans.
The company, which filed for bankruptcy protection in July 2022, said that it was rebalancing assets. This was to ensure Celsius had sufficient liquidity under the bankruptcy proceedings.
AMBCrypto noticed using Nansen data that about 31.5% of all the ETH waiting for withdrawal was initiated by Celsius. Moreover, the 53.8% share by Figment was also linked to Celsius, as per popular on-chain researcher Tom Wan.
Overall, the amount of staked ETH was 29.19 million as of this writing, with as many as 910,225 active validators.
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Signs of FUD?
Typically, such large-scale unlockings are taken with a pinch of salt by market participants. Well, this was because of the belief that they would be sold off.
Perhaps the anxiety played into the minds of weak hands as ETH slipped 1.39% in the last 24 hours, according to CoinMarketCap. But it remained to be seen if the FUD gets bigger in the days to come.