Ethereum’s proof-of-stake system is facing its largest test yet. As of mid-September, roughly 2.5 million ETH — valued at approximately $11.25 billion — is waiting to leave the validator set, according to validator queue dashboards. This backlog has pushed exit wait times to over 46 days, marking the longest wait in Ethereum’s staking history. The previous peak, back in August, saw an 18-day wait, illustrating the current scale of the issue.
Catalyst for the Bottleneck
The initial spark for this congestion occurred on September 9, when Kiln, a significant infrastructure provider, decided to exit all its validators as a safety measure. This decision was prompted by recent security incidents, including the NPM supply-chain attack and the SwissBorg breach. While these hacks weren’t directly related to Ethereum’s staking protocol, they were unsettling enough to prompt Kiln’s precautionary move, which added around 1.6 million ETH to the queue all at once. This scenario underscores how events in the broader crypto ecosystem can ripple through Ethereum’s validator dynamics.
Profit-Taking and Portfolio Shifts
However, the current queue buildup isn’t solely about security concerns. According to Benjamin Thalman, a Senior Analyst at staking provider Figment, the recent surge in ETH’s value — over 160% since April — has prompted some stakers to take profits. Other stakeholders, particularly institutional players, are adjusting their portfolio exposure, contributing to the swelling exit queue.
Despite this, interest in joining the Ethereum staking ecosystem is on the rise. The Securities and Exchange Commission’s (SEC) statement in May, clarifying that staking is not a security, has rekindled enthusiasm for staking. Additionally, the anticipation of ETH ETF approvals is encouraging funds to prepare for regulated ways to capture staking yield.
The Churn Limit and Its Implications
Ethereum’s churn limit, a protocol safeguard that restricts how many validators can enter or exit the network within a given time frame, plays a crucial role in this situation. Currently capped at 256 ETH per epoch (approximately 6.4 minutes), this limit is designed to maintain network stability. Yet, with more than 2.5 million ETH lined up, stakers are now facing a 44-day wait just to reach the cooldown step.
Thalman posits that a significant portion of the ETH exiting will likely be restaked under new validators. If 75% of the current queue is re-deposited, nearly 2 million ETH could flood the activation queue, resulting in delays for new ETH staking and creating a backlog on both sides of the validator queue. According to Thalman, “The activation queue is currently 13 days, and when you add the ~2 million ETH from those currently exiting (35 days) and 4.7 million from ETFs (81 days), the total is 129 days. This assumes no other ETH holders, like corporate treasuries, choose to stake and enter the queue.”
Balancing Act: Stability Amid Growing Pains
The growing queue highlights a paradox: Ethereum is functioning “as intended,” Thalman notes. The desire to both exit and re-enter the system underscores staking’s central role within the ecosystem. Yet, the network is experiencing the growing pains of a maturing, institutionalized system where infrastructure scares, profit cycles, and regulatory shifts converge in real time.
On one hand, the lengthy exit times might deter some participants, raising concerns about the network’s flexibility and responsiveness. On the other, it reflects the robust demand and interest in Ethereum’s staking mechanism, signaling confidence in the network’s long-term value proposition.
Looking Ahead
For Ethereum, the road ahead involves navigating these complexities while ensuring that the network remains secure and efficient. As the system matures, stakeholders will need to balance the need for stability with the flexibility required to accommodate fluctuating demands and external pressures.
In the meantime, Ethereum enthusiasts and stakeholders will be closely watching how the situation unfolds, eager to see whether the network can successfully manage this bottleneck and emerge stronger on the other side. With the crypto landscape constantly evolving, Ethereum’s ability to adapt will be key to maintaining its position at the forefront of blockchain technology.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
