Celsius bets big on Ethereum, raises validators wait times

Celsius Network has recently made substantial Ethereum (ETH) deposits into staking contracts, adding to an already prolonged wait for the Ethereum network to deploy new validators. This move is part of Celsius’ efforts to restructure its staked ETH stash and follows its requested bankruptcy protection. The lender’s strategies have resulted in a 44-day wait for new validators, with Celsius likely adding roughly a week to the wait.

Celsius’ Recent Deposits and Staking Moves

Data from Arkham Intelligence reveal that Celsius Network has deposited $745 million of ETH into staking contracts over the past two days. 

On Thursday, June 1st, the company transferred 291,000 ETH worth $553 million into staking contracts. 192,000 tokens were transferred into the Celsius staking pool, and 99,000 tokens were staked with Figment. Celsius proceeded to transfer tokens into staking contracts on Friday, with the goal of staking its entire 428,000 ETH hoard. According to Arkham statistics, the corporation has staked over $199 million of ETH via Figment and deposited approximately $12 million into the Celsius staking pool.

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Celsius Network’s Staking Strategy

Celsius Network has been actively reshuffling its staked ETH holdings since Ethereum’s Shanghai upgrade, which allowed withdrawals from staking contracts in April. Initially, the lender held around 460,000 ETH, valued at $870 million, staked with liquid staking platform Lido Finance, and approximately 160,000 tokens, worth approximately $300 million, deployed in its own staking pool. 

In order to reorganize its staking allocations, Celsius staked $75 million of its available ETH with the non-custodial institutional staking service Figment. Also, Celsius purchased 428,000 tokens from Lido Finance for $813 million. These assets were divided by the lender into two distinct addresses that it had previously utilized for staking with Figment and depositing into its own staking pool.

The Ethereum network’s queue for new validators is now even more backed up as a result of staking, which allows Celsius Network to receive rewards on its digital asset holdings while user deposits remain frozen for withdrawals. 

Tokens are staked by validators in return for rewards in order to secure the network and monitor transactions. Since the Shanghai upgrade, there has been a significant increase in the demand for staking, which has caused a backlog of new entrants waiting for validators that lasts for about a month. Deposits have surpassed withdrawals by more $5.5 billion, according to Nansen’s blockchain intelligence statistics.

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