Ethereum validator queue empties for first time since merge

• The validator queue on Ethereum has dropped to a record low.
• Staking APY has continued to decline in the past few months.

The Ethereum network [ETH] validator queue has emptied for the first time since the network’s transition to the proof-of-stake (PoS) consensus mechanism in September 2022, according to data from Validator Queues.

Source: Validator Queues

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This development means that there is no longer a waiting period for validators to begin staking their ETH.

The validator queue tracks the count of validators who have deposited their ETH but are waiting to be assigned to a shard or segment of the Ethereum network. Once assigned to a shard, validators can begin verifying transactions and earning rewards.

The depletion of the validator queue on the network represents a notable milestone because during the summer, for example, prospective validators had to wait for up to 45 days to join the network.

Source: Validator Queues

With an entry queue value of zero for the first time since Ethereum transitioned, the current demand for staking ETH has been satisfied, with 23% of ETH’s supply being staked and a staking annual percentage yield (APY) of 3.3%.

State of staking on the Ethereum network

Earlier this month, Ethereum’s Churn Limit increased from 12 to 13. In the context of Ethereum, the churn limit refers to the maximum number of validators that can join or leave the network during a single epoch, which is a period of about 6.4 minutes.

The increase in the activation and exit limits per epoch means that Ethereum can now process new and exiting validators daily. 

In a recent post on X, crypto analyst Tom Wan noted that the increase in Churn Rate “means the network can take in 93.6k new ETH deposits per day without requiring new validators to queue for more than > 1 day.”

While the cleared validation queue means new validators can now begin staking their coins immediately without waiting, it signals weakened demand for Ether staking. 

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According to data from Glassnode, the daily amount of new ETH staked assessed on a 30-day moving average has declined by 22% in the last three months. 

Source: Glassnode

Moreover, staking rewards have also dropped significantly in the past few months. Information retrieved from The Block Data showed that rewards earned by validators for locking up their Ether coins have dropped by 62% since May. At press time, staking APY was 3.3%. 

Source: The Block Data