Ether Unstaking Queue Hits Record $3.6B as Profit-Taking Accelerates

The queue to take ether ETH$3,135.51 out of the Ethereum blockchain's validation mechanism has hit a record high as traders and institutions rush to withdraw the staked tokens in what appears to be a mix of profit-taking, leveraged position unwinds and strategic repositioning ahead of potential staking-linked exchange-traded funds (ETFs).

As of Aug. 15, more than 816,000 ETH worth around $3.6 billion sat in the exit queue, according to validatorqueue.com. That’s up from about 625,000 ETH just a month ago, and pushes the wait time for withdrawals to over 13 days, the longest on record.

Ethereum’s proof-of-stake mechanism rewards investors who lock up their ether in exchange for newly minted tokens as part of the process that secures the blockchain and approves blocks. They receive what amounts to an interest rate of about 3% a year, according to CoinDesk's Composite Ether Staking Rate (CESR) index.

The unwind occurred as ETH prices surged to near record highs of $4,780 this week, spurring a wave of profit taking.

Another key driver is withdrawals across liquid-staking protocols, which issue stakers with alternative tokens so they can remain active in decentralized finance (DeFi) while reaping the stak. Data shared by DeFi researcher Ignas shows Lido, Ether.fi and Coinbase accounted for the bulk of recent unstaking, with Lido alone seeing 285,000 ETH in exits and its own withdrawal queue at all-time highs.

Leveraged Positions Unwound

Part of the rush stems from the dismantling of leveraged ETH staking strategies. These “looping” trades, staking ETH with a provider like Lido for stETH, depositing that in lending protocols such as Aave, borrowing more ETH, and repeating, boosted yields during calmer markets.

But higher borrow rates, fears of a stETH/ETH depeg and high liquidation risk have made the trade less appealing. Ignas points to Tron founder Justin Sun closing his looped positions in July as a possible trigger, with others following suit to avoid getting caught in a potential cascade of liquidations.

Arkham Intelligence data shows that over 278,000 wstETH sits in “high risk” territory on lending platforms, with a health factor between 1x and 1.1x, a thin buffer against forced liquidations in volatile conditions.

Arbitrage and Early-Exit Premiums

The slight but persistent drift between stETH and ETH prices has also opened arbitrage opportunities. Traders can unstake ETH, swap it for stETH at a discount, and then unstake again, cycling through the trade.

Others are simply willing to pay up to 1% premiums to exit early by selling their LST or liquid restaking tokens (LRTs) on the secondary market, avoiding the record-long validator queue altogether.

Profit-Taking and ETF Positioning

The most obvious driver is profit-taking after ETH’s rally toward record highs. Many current exits are likely from stakers who entered the market when ETH traded between $1,500 and $2,000, now locking in gains after more than doubling their holdings’ dollar value.

Ignas speculates that withdrawals may also be positioning for the launch of U.S. ETH staking ETFs. If those products use custodians outside the largest staking pools or rely on institutional staking partners like Figment rather than Lido, large holders might prefer to move their ETH in advance. ETF inflows have been robust, with $1 billion entering ETH ETFs on a single day this week alone, potentially offsetting some selling pressure.

Lido’s Share and the Bigger Picture

Lido’s own withdrawal queue, roughly 163,000 ETH, remains only a fraction of the total 816,000 ETH in the global exit queue, but it reflects a wider market trend. The unwind of a major Lido position three weeks ago added to the wave, but the surge is broader and multi-sourced.

Despite the scale of exits, net selling pressure could be blunted by fresh staking demand. ETF inflows, arbitrage capital, and new treasury strategies are still pulling ETH into staking contracts. And as Ignas put it in the aforementioned tweet thread, “while the unstaking queue is at ATH, so are ETF inflows” meaning the market might absorb the selling without significant price dislocation.

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.