Celsius Network, the embattled crypto lender, is shaking up the staking strategy of its ether (ETH) stash. This move has further congested the already month-long queue to activate new validators on the Ethereum network. The firm has transferred some $745 million worth of ETH over the course of two days, according to data from Arkham Intelligence. Tom Wan, an analyst from 21Shares, stated that the queue has been extended by nearly a week.
Asset Transfers as Part of Firm’s Restructuring Process
The asset transfers are part of the restructuring process the firm has taken since filing for bankruptcy protection in July. This used to happen due to falling cryptocurrency prices and multiple user withdrawals. Last week, the U.S. bankruptcy court auctioned off Celsius to the winning bidder Fahrenheit, a group backed by Arrington Capital, who will assume the assets of the firm, consisting of the institutional loan portfolio, tokens staked, and crypto mining units.
Celsius’ ingenious staking maneuvers have been underway since the Shanghai upgrade in April enabled ETH withdrawals from staking contracts. Initially, the firm had 460,000 ETH staked with Lido Finance, and 160,000 deployed in its own staking pool.
Staking Tokens for Rewards while User Deposits are Frozen
Celsius requested to redeem its ETH from Lido as soon as the platform allowed withdrawals. It has already reclaimed 428,000 tokens worth $813 million. Figment, an institutional staking service, received $199 million in staked assets, while Celsius received $12 million.
Even after this reallocation, Celsius wallets still have about $109 million in ETH according to Arkham. Staking these tokens will enable the firm to receive rewards while deposits are frozen for its users.
The increased demand and large bulks of ETH joining the queue have pushed back the estimated time to activate validators to 44 days. If all the 428,000 ETH are committed to staking, it could potentially push it back to 45 days, as predicted by Tom Wan on Thursday.
Significant Increase in ETH Deposits and Staking Activities Since the Shanghai Upgrade
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