Ethereum Validator Exit Queue Hits Record 74,400 Amid Aave Liquidity Shock

• Ethereum validator exit queue soaring to a record 74,400 as of July 26.
• Liquidity pressures on Aave and upgraded restaking options fueling the exodus.

On July 26, 2025, the Ethereum validator exit queue hit 74,400—the highest in history—driven by cascading liquidity shocks on Aave and migration to EigenLayer’s protocols, The Block reports. This unprecedented surge followed a liquidity shock on Aave, a decentralized lending platform. The shock triggered massive ETH withdrawals, forcing large investors and vaults to exit their validator positions.

The disruption began with a significant withdrawal of approximately 67,000 wETH from Aave. This caused borrowing rates for wrapped Ethereum (wETH) to spike dramatically. Consequently, rates rose from around 3% to double digits, disrupting profitability for leveraged trading strategies involving staked Ethereum (stETH) and liquid restaking tokens (LRTs). To unwind these positions, traders redeemed stETH and wstETH through the validator exit process, converting it into raw ETH to repay their loans.

This selloff caused stETH to trade at a discount of about 0.6% compared to ETH, which created an arbitrage opportunity. Market participants capitalized on this by purchasing discounted stETH and joining the exit queue to redeem it for ETH. These arbitrage moves, in turn, further worsened congestion in the validator exit queue.

Meanwhile, EigenLayer, a restaking protocol, reopened its deposit caps. This offered incentives for validators to migrate from existing staking positions. This new opportunity motivated some validators to shift strategies, contributing to the surge in exit requests.

The Block noted the exit queue congestion is likely temporary. As Aave’s borrowing rates stabilize, leveraged trading strategies should normalize. This will close the stETH discount and ease arbitrage-related exits. However, at its peak on July 26, waiting times in the exit queue exceeded 12 days, and the estimated value of ETH in the queue reached $2.4 billion.

According to CoinMarketCap, as of July 29, 2025, at 15:21 UTC, Ethereum (ETH) is trading at $3,372.54, a 0.09% drop over 24 hours. At the same time, EigenLayer’s EIGEN token is trading at $9.30, down 6.76% over the same period.