MetaMask Exits Could Add $1.45 Billion to Ethereum Queue

MetaMask’s precautionary validator exits could add up to 565,056 ETH to Ethereum’s staking demand. The network already had 1,398,922 ETH waiting to enter staking on October 7. Together, the balances would total 1,963,978 ETH, worth about $5.04 billion at an ETH price of $2,564.19.

The incident began on September 30, when Bitquery detected 0.36 ETH in diverted block tips across 18 blocks. The amount was worth about $923 at the October 7 price. MetaMask’s October 1 update reported no indication that customer wallets or funds were affected and described the validator exits as a precaution.

An October 1 snapshot identified 16,965 MetaMask-operated validators holding 565,056 ETH that had exited or entered Ethereum’s exit queue. MetaMask has not confirmed the total. Lido expected its final affected validators to exit by the end of October 7.

Exiting a validator does not immediately make its ETH available for staking again. The process includes the exit, withdrawal and a new activation. Lido estimated that the full cycle could take up to 45 days.

Two Lido groups linked to the incident held 252,288 ETH, according to Bitquery data. Lido expects that stake to return to its protocol, although the data does not establish whether all of it will be assigned to the same operators. A contributor proposal published on October 5 called for stopping new deposit allocations to MetaMask operators in two Lido curated modules. The proposal was intended for a future on-chain vote, and its adoption was not confirmed.

Validator Queue recorded 1,398,922 ETH in Ethereum’s entry queue at about 14:18 UTC on October 7. The estimated waiting time was 24 days and seven hours. Another 822,405 ETH was waiting to exit. About 43.7 million ETH, or 35.78% of the cryptocurrency’s supply, was staked.

Ethereum’s entry limit was 256 ETH every 6.4-minute epoch, equal to about 57,600 ETH per day. Restaking the 252,288 ETH linked to Lido would use about 4.4 days of entry capacity. Activating all 565,056 ETH in the wider MetaMask group would use about 9.8 days.

The existing entry queue was worth about $3.59 billion at the October 7 ETH price. Adding the full MetaMask-related balance would raise the theoretical total to $5.04 billion. The calculation assumes that all returning ETH creates new demand and that the existing queue does not change.

Ethereum’s exit and entry queues operate separately. Exiting validators do not use entry capacity. The entry queue is affected when withdrawn ETH is deposited again for staking. The actual delay will depend on withdrawals, new deposits and how much of the affected ETH has already entered the queue.

Validators can continue earning rewards while they remain online and perform their duties before the exit epoch. Shutting them down earlier can result in missed rewards or penalties. At a 2.59% annual percentage rate, keeping all 565,056 ETH inactive would represent about $1.54 million in foregone rewards after 15 days, $3.08 million after 30 days and $4.63 million after 45 days. The estimates assume a constant ETH price and rate and exclude fees and other earnings.