For a few months now, all eyes have been on the Ethereum staking queue, which, after a year of remaining low, began to tick back up in June. 

Though it started to decline, last Friday Unchained reported that it was set to rise again with four staking flows set to converge on the network in the coming weeks. One of those major flows is from Kiln, a $16 billion staking provider.

Read more: Ethereum Faces Looming Staking Bottleneck

On Sept. 9, Kiln abruptly pulled 1.6 million ETH ($6.6 billion) from the Ethereum network. It will now be taking a major step towards restaking it. 

“We target early next week to re-enable new ETH validators,” wrote Thomas de Phuoc, co-founder and chief operating officer at Kiln in an email to Unchained.

This story is an excerpt from the Bits + Bips newsletter.

A Rush to the Exits

As a precautionary measure, the company abruptly started to unstake its ether on Sept. 9, a day after a security vulnerability was discovered with its Solana staking operations that “resulted in Solana funds being improperly removed from the wallet used for staking operations.” The fear was that the same issue could impact Ethereum wallets. 

Read more: Grayscale Prepares to Stake ETH From Ether ETF: Arkham

The rush for the exits led to a massive surge in Ethereum’s exit queue, which can now take over 40 days to unstake.

Coming Collision

This announcement will likely come as welcome news to Kiln’s clients, who are missing out on the passive income that they can earn. The so-called “risk free” rate for staking, as calculated by CoinFund’s Composite Ether Staking Rate (CESR) is 2.9%. 

However, according to CoinFund’s Chris Perkins, Kiln’s clients were likely earning more than that. “Professional stakers can expect to outperform CESR by 30-40 bips as a result of their Maximum Extractable Value (MEV) strategies,” Perkins told Unchained.

But it is important to note that this announcement from Kiln does not mean that the 1.6 million ETH will be restaked right away, at least by Kiln itself. Spinning up new validators is just the first step in ensuring that they are safe to hold billions of dollars worth of crypto assets again. Additionally, as demonstrated in the above chart, the vast majority of Kiln’s assets remain in the unstaking queue.

Read more: Ethereum Foundation Forms AI Team

Once that happens, it could still take a few days for those assets to exit the staking queue and get back to securing the network.

And as discussed in the Unchained story last week, these funds will likely be merging around the same time with billions of funds from digital asset treasury companies, ether spot ETFs that are soon expected to be allowed to stake, and a potential inflow of retail demand as a result of Ethereum’s historically bullish 4th quarters.