Ethereum Staking Queue Hits Record Size Amidst Security Incident

The MetaMask staking infrastructure was hit by a small security incident on September 30th, where an attacker redirected tips from 18 blocks produced by MetaMask Staking validators to a wallet funded through Tornado Cash. The total amount diverted was around $1,000 in ETH.

However, the real issue was not the theft itself, but rather the massive queue that formed as a precautionary measure. Within a day, the exit queue for Ethereum's largest staking pool, Lido, grew from zero to approximately 576,000 ETH, worth around $1.5 billion.

The majority of this queue consists of validators run by MetaMask Staking. The process of exiting the queue is long and arduous, taking around 45 days, with each validator waiting in Ethereum's exit queue, then stopping its validation duties, and finally having its ETH swept back to Lido.

This has significant implications for staked ETH holders, who may experience lost rewards due to their validators being offline. Lido estimates that about 230,000 ETH will be idle for around 37 days at a 3% yield, resulting in a loss of around $700,000 or 0.08 stETH per 1,000 held.