A recent security incident involving staking provider Kiln has led to the Ethereum validator exit queue surpassing 2 million ETH.
Reasons for the Massive Queue Increase
On September 8, SwissBorg disclosed a theft of approximately 192,600 SOL worth about $41 million, prompting Kiln to halt operations on Solana. Kiln explained that an API vulnerability allowed hackers to access a wallet, leading the company to conduct a security review.
How Kiln Manages Validator Exits
By September 10, Kiln announced it would initiate an "orderly exit" for all its Ethereum validators. The firm controls around 1.6 million ETH, and under Ethereum's consensus rules, exits must occur staggered. Consequently, the queue for withdrawing ETH quickly swelled, with exit times stretching beyond 35 days.
Impact on the Ethereum Network
The incident underscores how swiftly staking infrastructure issues can ripple across Ethereum. While extended exit times may frustrate users, the network handled the surge of exits without disruptions. However, restoring trust in Kiln will be a significant task for the firm.
The situation with Kiln serves as a reminder of the importance of security and resilience in staking, highlighting that effective operational performance is as crucial as code reliability.
