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- Ethereum Foundation unstaked 17,035 ETH worth $40M after nearing 70K target.
- Move used Lido unstETH queue; no official reason disclosed, sparking market attention.
- DeFi protocols pledge 43,500 ETH after the Kelp exploit left $195M in bad debt on Aave.
The Ethereum Foundation has reduced part of its staking position shortly after nearing its internal target of 70,000 ETH. On Saturday, it unstaked 17,035.326 ETH worth about $40 million, according to Arkham Intelligence data. The move followed a period of steady accumulation across recent months.
The transaction involved depositing wrapped staked ETH into the unstETH contract of Lido Finance. The ETH will be returned once the withdrawal queue completes. This process follows standard validator exit rules on Ethereum.
Ethereum Foundation Unstaking Process in Focus
Unstaking refers to withdrawing ETH that was previously locked to secure the network. These funds were deposited into the Beacon Chain and remained locked while earning rewards. A withdrawal request places the assets into a queue before release.
Source: Arkham
The Ethereum Foundation has not disclosed the reason behind the 17,000 ETH withdrawal. The absence of an official explanation has drawn attention from market participants. Some users have speculated about a possible sale following the move.
The expansion follows an increase in staking activity by the foundation under a refined policy that was announced in June 2025. The policy enables staking and decentralized finance involvement to finance research, development, and ecosystem grants. This was a change in the way the foundation handles its treasury.
Since February, the foundation has been gaining ground. It first staked 2,016 ETH and then 22,517 ETH in March. Recently, it added over 45,000 ETH in several transactions in the month before.
Also Read: Tether Locks Down $344 Million in Massive Blow to Crypto Crime
Staking Nears 70K as Governance Risks Emerge
These investments increased the size of the staked funds to approximately 69,500 ETH. This figure put the foundation second only to its internal 70,000 ETH target. The unstaking that has just happened came soon after hitting this range.
The matters of governance remain to be debated along with these measures. Large-scale staking by the foundation is associated with risks that have been forewarned by Vitalik Buterin. He mentioned that such positions were capable of influencing neutrality in controversial hard forks.
Simultaneously, the fallout of a significant exploit is being dealt with in decentralized finance markets. The Kelp restaking platform incident saw the loss of approximately $293 million. There were more than 116,000 restaked ETHs in the attack.
The stolen tokens were used as collateral by hackers to borrow money. This accrued approximately $195 million of bad debt on Aave. This incident strained the overall DeFi lending sector.
In response, protocols have implemented a coordinated response effort. The DeFi United program has already raised over 43,500 ETH, worth approximately $101 million. Among them are Lido DAO, Golem Foundation, EtherFi Foundation, and Mantle Network.
Also Read: Morgan Stanley Unveils Stablecoin Reserve Fund Under GENIUS Act
