The right-back queue that has strained the staking ecosystem on the Ethereum (ETH) network for months has finally been completely eliminated.
The congestion that began in September has cleared up after almost four months, indicating that staking protocols and the DeFi ecosystem are “back to normal.”
The security mechanism in question was disabled when Kiln, a major Ethereum staker, withdrew all validators from its network after hackers exploited a vulnerability in its staking infrastructure. This development delayed staking withdrawals for several weeks and created significant operational issues, especially for platforms staking ETH on behalf of users.
Kirill Kutakov, co-founder of liquid staking protocol Stakewise, said that crypto markets are pricing in “time risk” created by exit queues, and the longer the queue, the more likely the price of liquid staking tokens will fall. According to analysts, once the exit queue is gone, the chances of these tokens trading at a discount will also decrease.
Streamlined queues also allow DeFi-powered Ethereum staking strategies to exit faster and at lower cost. This stands out as a factor that increases market efficiency.
Ethereum's exit queue serves as a fundamental part of network security. This mechanism limits the amount of ETH that can leave the network based on the total staked assets. Currently, this limit is approximately 57,600 ETH per day.
The cleared exit queue is also a big relief for Rocketpool, the third largest liquid staking protocol that manages $1.8 billion in staked ETH. Relocating validators for node operators will be much easier ahead of the Saturn update to the protocol, scheduled for early February.
Although the exit queue has been relaxed, the queue for new validators to join the network has now increased significantly. According to data from Beaconcha.in, the amount of ETH queued for staking has increased by approximately 300% since December 24 to over 1.7 million ETH. New validators currently have to wait more than 30 days before joining the network.
*This is not investment advice.
