The Ethereum network has recently witnessed an astonishing wave of unstaking, with the number of Ether in the unlocking queue reaching 2,631,772, far exceeding the current staking queue of 758,418, resulting in a net difference of 1,873,354. Based on the current market price, this equates to approximately $8.29 billion in potential liquidity set to enter the market.

One of the reasons behind this phenomenon is a recent major security incident. The cryptocurrency platform SwissBorg suffered a hacker attack, losing approximately $41.3 million worth of 192,600 SOL. Although this incident directly involves the Solana ecosystem, it has raised concerns about asset security across the entire industry.

As a countermeasure, the large staking service provider Kiln announced an important decision. Kiln not only provides services for Solana, but its business scope covers almost all major Proof of Stake (PoS) networks, which naturally includes Ethereum. For security reasons, Kiln has decided to orderly withdraw all its ETH staking.

Kiln's official statement claims that this decision was made based on consultations with industry stakeholders and recommendations from top security firms. They emphasize that customer assets are always in a secure state. According to the design of the Ethereum protocol, the entire withdrawal process is expected to take between 10 to 42 days, with the specific time varying depending on the validating node. During the withdrawal period, validating nodes can still earn rewards. After the withdrawal is completed, the protocol will automatically process the fund withdrawal within 9 days.

It is worth noting that Kiln has staked a total of approximately 1.6 million ETH. This means that the market may see a large amount of ETH appearing in the unstaking queue in the short term. However, it is important to recognize that unstaking does not equate to an immediate sell-off. The final destination of these ETH remains uncertain.

This series of events has sparked concerns in the market about potential selling pressure. However, we should also note that the unstaking process is gradual and will not cause an instantaneous massive shock. At the same time, this also reflects the health and flexibility of the Ethereum network, allowing participants to adjust their strategies based on market conditions and security considerations.

This is undoubtedly a development worth closely monitoring for the Ethereum ecosystem and the broader cryptocurrency market. It not only tests the stability of the network but also provides us with a window to observe how large institutions respond to security challenges. In the coming weeks, how the market digests this potential liquidity will be a topic of great interest.