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Engineering
Today on April 12, at 10:27 pm UTC, epoch 194048, the Shanghai upgrade is expected to take place.
This means that for the first time stakers will be able to exit their validators and obtain their staked collateral (32 ETH per validator).
These exits will be subject to an Exit Queue however. In this article we go through what this Exit Queue is, why it exists, and what kinds of delays are to be expected.
Ethereum validators can be seen as locked ETH, and as a state.
When a validator is funded, 32 ETH are locked and the status of the validator is modified:
In order to unstake the validator, and retrieve the locked 32 ETH, validators must indicate to the consensus layer that they want to retire.
To do this, the validation private key of the validator must sign a VoluntaryExit message and broadcast it to the Ethereum Consensus Layer.
The validator then joins the Ethereum Exit Queue, and its state is set to active_exiting.
During the Exit Queue, a validator can be in 2 states:
The time it takes to get through the Exit Queue varies depending on the number of active validators in the network. Only a certain amount of validators can be exited per epoch (32 slots, ~6.4 minutes), we call this number the churn limit and it can be computed as follow:
churn_limit = active_validators_count / churn_limit_quotient where:
At the time of this article, there are 562,792 validators, so only 562,792 / 2**16 = 8.57 i.e. ~8 validators can exit every epoch (6.4 minutes).
Kiln made a public spreadsheet to visualize the different Exit Queue scenarios. Feel free to fork it and use it for your own analysis!
Looking at the current network conditions (562,792 active validators), this would be the exit queue’s estimated timelines if a validator joins after X validators are exiting:
A couple interesting scenarios:
Note that the Activation Queue works in a similar way to what we see in the Exit Queue.
The Exit and Activation Queues serve a critical role in maintaining the security of the Ethereum Consensus Layer by regulating the flow of locked ETH entering and leaving it through a churn limit mechanism. By controlling the volumes going in and out of the consensus, these queues help maintain the health and integrity of the Ethereum protocol.
Once a validator has finished the Exit Queue, it is set as withdrawable. From here, 16 validators with 0x01 withdrawal credentials are withdrawn every block (~12 seconds). Once withdrawn, the validator balance is burnt on the consensus side and minted on the withdrawal_credentials of the validator. For more details on the Ethereum withdrawal mechanisms, read our “How Ethereum staking withdrawals will work” blog post.
Kiln is the leading enterprise-grade staking platform, enabling institutional customers to stake assets, and to whitelabel staking functionality into their offering. Our platform is API-first and enables fully automated validators, rewards, and data and commission management. With over $2.2b stake under management, Kiln has a particularly strong track record on Ethereum as we run about 3% of the network; this includes 22,000+ validators with 0 slashing events.
Thanks @pwnh4 for writing this article!