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ETH The Ethereum verifier queue has a backlog worth approximately US$2.5 billion in ETH, which experts say is not a really bullish signal.
As the number of verifiers wishing to participate in Ethereum network pledge has surged, the backlog of ETH in the activation queue has reached approximately 2.5 million. Due to current network congestion, new pledge participants need to wait approximately 43 days to activate their tokens. However, Thomas Brenner, head of custody and pledge at Sygnum Bank, pointed out that the long wait should not be directly interpreted as a strong bullish signal.
Technical mechanisms and protocol limitations are the main reasons.
Brenner said that although congestion in the validator queue reflects institutional needs, the technical operating mechanism of the Ethereum protocol has also had a significant impact. He pointed out that after the Dencun upgrade, the daily verifier login capacity was limited to approximately 57,600 ETH, while the Pectra upgrade did not increase this limit.
The Pectra upgrade allows a single validator to hold up to 2,048 ETH through automatic compound interest. Large pledge operators can append ETH to existing verifiers without creating new ones. But the problem is that even if only 1 ETH is added to an existing validator, the transaction will enter the same activation queue as the new pledge participant.
Therefore, Brenner believes that not all ETH in the current queue stems from new investor demand. Some of this accumulation includes reallocations of previously pledged ETH, additional investments in existing verifiers, and increments from the compound interest process.
Vacancy in the exit queue is the key signal
Brenner said that the signal for a stronger market for Ethereum is actually an almost empty exit queue. Investors did not join the exit queue to redeem their pledged ETH, indicating that existing participants are still holding their positions on the network.
Brenner explained: "Almost no one terminated their pledged positions. This reflects real trust. Admission queues measure the dual role of demand and infrastructure mechanisms. "
According to current data, there are approximately 41.2 million ETH in pledge status on the Ethereum network, which accounts for approximately 33.8% of the total circulation supply of Ethereum.
Institutional participation has not decreased, but privacy issues pose a barrier
Brenner also pointed out that despite weak ETH price performance, institutional investors have not stayed away from pledge activity. He said that many institutions regard pledge proceeds as a natural and fundamental feature of Ethereum, but one of the biggest obstacles to institutional participation is privacy issues.
The verifier address, deposit address and withdrawal transaction used in Ethereum pledge can be traced online, which makes institutions cautious when expanding the scale of pledges. Brenner believes that unresolved privacy issues remain one of the main obstacles to faster growth of the institutional Ethereum pledge market.
* This article does not constitute investment advice.
