Nobody Wants to Unstake Ethereum Anymore: Here's Why It's a Big Deal

It was less than a year ago when the Ethereum validator exit queue had stretched for 45 days as millions of tokens waited to be unlocked from staking. Today, that queue has completely emptied out, while the number of ETH staked continues to grow to a new record.

Current data from ValidatorQueue shows that there are zero ETH waiting to be unstaked from the network. This means that if anyone decides to unstake their ETH, they can do so immediately, subject only to the protocol’s normal withdrawal process. This is a significant turnaround from Q3 last year, when the exit queue had swelled to roughly 2.6 million coins, forcing validators to wait up to 45 days.

However, the narrative has completely flipped: ValidatorQueue shows that over 2.5 million ETH is currently waiting to enter staking, translating into an estimated activation delay of nearly 44 days. Investors are willing to wait for a month and a half just to begin earning staking rewards. This shifted imbalance suggests that investors are confident in Ethereum’s long-term outlook despite the year-to-date price retracement. It also removes one of the most significant concerns from last year – that millions of staked ETH could suddenly flood exchanges if validators decide to cash out.

The broader staking picture has also improved: the total number of active validators has neared 900,000, and almost 41 million ETH is currently staked, equivalent to roughly 33.6% of the entire circulating supply. This is the highest percentage in the network’s history, meaning that every one out of three ETH is locked in staking rather than sitting on exchanges or actively circulating.

Although staked ETH is not permanently removed from supply, it is generally considered less liquid because validators must go through Ethereum’s withdrawal process. Interestingly, the record amount of staked ETH comes even as staking rewards have declined to 2.62% per year from 3.05%, and issuance has increased from 0.757% to 0.842%.

Source: https://cryptopotato.com/nobody-wants-to-unstake-ethereum-anymore-heres-why-its-a-big-deal/