ETH exit queue to spike as Kiln withdraw validators
Educator Anthony Sassano says the Kiln is exiting validators as a precaution, with ETH expected to be restaked under new keys. The company reports no issue with the Ethereum network.
The Ethereum validator exit queue is set to jump in the coming days, but this is an operational response, not a sell signal, according to educator Anthony Sassano. He expects the ETH coming off Kiln‑managed validators to be restaked with new keys, not sent to market.
Kiln said it began an orderly exit of all Ethereum validators as a precaution after an infrastructure issue linked to its partner SwissBorg. SwissBorg reported about 193,000 SOL drained from its Earn program through a vulnerability in the staking‑partner API. Kiln says client ETH remains secure; some services are paused while it hardens systems and prepares a post‑mortem. Kiln stresses there is no issue with the Ethereum network itself.
For scale, Kiln collectively stakes around 1.6 million ETH. Sassano noted the exit queue has already risen by roughly 700,000 ETH. He expects it to grow further as Kiln rotates validator keys. Network‑wide, about 35.5 million ETH (≈ 29% of supply) is currently staked, so big operators can move queue metrics without implying imminent sales.
Exiting a validator takes 10–42 days, depending on network conditions. Withdrawals then complete in up to ~9 days. Validators continue earning rewards while in the exit queue. These timings are enforced by the protocol and aren’t adjustable by Kiln.
This ETH will presumably be restaked using new validator keys, aka it’s not going to be sold– Anthony Sassano.
Recent weeks have already seen swings in both entry and exit queues – a record exit in late August, followed by a surge in staking demand on Sept. 3 as institutional programs and treasuries sought yields. Queue readings are volatile and reflect operator actions as much as price.
As of Tuesday, Kiln reported no fund losses beyond the SwissBorg incident. The company is coordinating with security firms and stakeholders and will provide updates as the exit progresses.
