Also important to note that the average balance of stakers is going up. So while the number of exits looks particularly bad, there is consolidation happening at the top (because of Pectra)
But most of it is from looping. the downside of DeFi legos when funding rates go up
🚨 Surge in ETH Unstaking — What’s Going On?
Over 475K ETH validators are exiting, pushing wait times to 8+ days. While some blame profit-taking or the Pectra upgrade, the real trigger is soaring ETH borrowing rates since July 16 (peaking at 18%).
This forced mass unwinding of ETH leverage loops on Aave, as negative yield spreads crushed profitability. Traders rushed to repay loans, exit LST/LRT positions, and reclaim ETH — causing depegs and queue congestion.
Arbitrageurs are now buying discounted LSTs to redeem for full ETH, making it worse. Meanwhile, new staking demand remains strong, driven by ETH outperforming BTC and treasury allocations ($2.5B+ in ETH).
👉 ETH’s PoS system is working as designed, but the LST/LRT ecosystem still shows fragility under stress.
Stay alert if you’re using stETH, eETH, rsETH or running loop strategies.
#Ethereum #DeFi #LST #LRT #CryptoAlert
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