SNEAK PEEK
- Celsius Network disrupts ETH staking with $745 million deposit.
- Celsius’ move extends Ethereum validator queue to 44 days.
- Celsius continues staking despite recent bankruptcy and acquisition.
The crypto lending firm Celsius Network is stirring the Ethereum staking landscape with its recent, and quite substantial, move to deposit ETH into staking contracts. The substantial deposit of $745 million worth of Ether (ETH) into staking contracts over the last two days has notably extended the Ethereum validator queue to an unprecedented 44 days.
According to data from Arkham Intelligence, this shift in Celsius’ staking strategy has had significant ramifications on the Ethereum network’s waiting period for validator deployment. The firm’s massive ETH deposit was facilitated by redeeming approximately $813 million worth of staked ETH from the liquid staking leader, Lido Finance.
If Celsius decided to stake all the 428k $ETH, it would take 45 days and 4 Hours to clear the whole activation queue. Essentially adding 6 Days & 15 hours to the queue
Thanks @JimmyRagosa for flagging! pic.twitter.com/gbvvu9YSU6
— Tom Wan (@tomwanhh) June 1, 2023
Tom Wan, an analyst at crypto investment product manager 21Shares, highlighted that Celsius’ deposit could account for nearly a week’s worth of the added waiting time.
Unveiling the Revolution Triggered by Ethereum’s Shanghai Upgrade
According to sources, the Shanghai upgrade to the Ethereum network in April enabled withdrawals from staking contracts, a feature that Celsius took advantage of in a big way. At the time of the upgrade, Celsius had about $870 million worth of ETH staked with Lido Finance and around $300 million deployed in its own staking pool.
However, Celsius started to shuffle its ETH assets between Lido, its own staking pool, and institutional staking service Figment. Later on, Celsius reclaimed 428,000 ETH tokens from Lido and divided these assets between two crypto addresses, one used for Figment and the other for its own pool.
This decisive move came in the wake of Celsius filing for bankruptcy protection in July due to liquidity issues. The firm was recently auctioned to Fahrenheit, an investment group backed by Arrington Capital, which will take over Celsius’ assets, including its staked cryptocurrencies.
Nevertheless, Celsius has continued moving tokens into staking contracts and appears on track to stake all of the reclaimed 428,000 ETH. As of now, Celsius has staked about $199 million worth of ETH via Figment and deposited about $12 million into the Celsius staking pool. After these transactions, Celsius still holds roughly $109 million in ETH.
