What Happened on May. 15th | Lido's $ETH withdrawal Coming
Ethereum's activation and exit queues are mechanisms to protect the stability of Ethereum's PoS consensus. Ethereum's churn limit, a parameter that defines a cap on how many validators can be processed by the activation or exit queue, ensure that the validator set remains stable.
The current Ethereum validator queue is dominated by new validators who want to enter. At the time of writing, there are 49,258 pending validators waiting to enter and just 2 validators to exit. The Ethereum withdrawal queue is almost zero, while activating validators have to wait almost a month!
With Lido opening withdrawal function, this may bring a new wave of exiting users who have requested to withdraw their staked $ETH from the Lido protocol.
According to research from 21share, if 10% Lido's users request to withdraw their funds, the protocol has a buffer of rewards and daily deposits to cover those withdrawals without having to liquidate too many of the staked $ETH.
If the unstaking request exceeds 10%, it would cause a larger number of validators exits, potentially leading to longer queues for withdrawals.
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