Ethereum's proof-of-stake system is facing unprecedented strain with over 2.5 million ETH, valued at approximately $11.3 billion, currently waiting to exit the network's staking mechanism. This massive backlog has stretched the exit queue to 44 days - the longest wait time in Ethereum's history since implementing staking.
The situation was triggered on September 9, 2025, when Kiln, a major staking infrastructure provider, voluntarily exited all of its validators as a security precaution. This single move pushed approximately 1.6 million ETH into the exit queue. Kiln's decision followed unrelated security incidents including the NPM supply chain attack and the SwissBorg breach, which raised security concerns across infrastructure providers.
According to Benjamin Thalman, Senior Analyst at Figment, around 4.5% of all staked Ethereum is now in line to exit. "Ethereum's validator exit queue has spiked, reaching new highs, raising fair questions about timelines and rewards," Thalman noted in a recent report. He emphasized that Ethereum is functioning as designed, with rate-limiting exits protecting network stability.
While security concerns were the immediate catalyst, analysts note that profit-taking is also a significant factor. Ethereum's price has rallied more than 160% since April, tempting institutional treasuries and funds to rebalance their positions. Meanwhile, new drivers of staking demand are emerging, including the SEC's May statement that protocol staking is not a security, which boosted ETH delegations.
The process involves complex timing: validators in the exit queue continue to earn rewards, but once they formally exit, they face a 27-hour "withdrawability delay" followed by a withdrawal sweep that can take up to 10 days. If large portions of the existing ETH return to staking - Figment estimates as much as 75% - nearly 2 million ETH would flood the activation queue. Combined with anticipated ETF demand, activation wait times could stretch past 120 days, raising questions about Ethereum's readiness for global-scale financial infrastructure.