The Protocol: Staked ETH exit queue moves down to zero

Network News

ETH STAKING EXIT QUEUE DROPS TO ZERO: Ethereum is processing more transactions than at any point in its history, with daily activity pushing to new records last week. The network processed a record 2,885,524 transactions last week, the highest daily count in its history. The surge caps a sharp pickup in onchain activity this month, with transaction volumes pushing to new highs into early 2026. Activity has accelerated since mid-December, reversing a gradual slowdown that persisted through much of 2025. At the same time, average fees remain near recent lows, even with the pickup in usage. The combination points to a network that is absorbing higher demand more smoothly than past cycles, helped by recent upgrades and more activity moving to layer-2 networks. Staking dynamics have also shifted. Ethereum’s validator exit queue has fallen to zero, meaning stakers can now withdraw ETH almost immediately, while entry queues still show long waits. The empty exit queue mainly shows there isn’t a big rush to lock up ETH or pull it out right now, and staking looks steady rather than in a boom. — Shaurya Malwa Read more.

NEOBANK TRENDS GROWS THANKS TO STABLECOINS AND PAYMENTS: For years, crypto’s most ambitious builders focused on the industry’s plumbing: faster blockchains, cleaner smart contracts, better protocol economics. But a growing number of projects are now stepping away from the base layer and into something far more familiar to everyday users: payments, cards and neobank-like services. The shift reflects a broader realization inside crypto: while protocols matter, adoption tends to follow utility. Projects are now starting to pitch something else: that users can spend, save, and borrow with crypto without needing to understand the technicalities underneath it all. The evolution in messaging comes as stablecoins are positioned as having an everyday financial use case. Research from Messari argues the next phase of crypto neobanks won’t simply mirror fintech apps on top of blockchains, but instead will attempt to rebuild core banking functions, like spending and borrowing directly onchain without relying on traditional payment rails. Ethereum restaking platform ether.fi was among the crypto-native projects to make that pivot, moving beyond protocol development toward offering payment and banking-style services built on top of decentralized finance. Since then, the trend has only accelerated. Polygon, long known primarily as a scaling network for Ethereum, recently announced new acquisitions for crypto rails and payments infrastructure for stablecoin use cases. — Margaux Nijkerk Read more.

VITALIK PROPOSES DVT STAKING: Ethereum co-founder Vitalik Buterin has outlined a proposal to build distributed validator technology (DVT) directly into Ethereum’s staking protocol, aiming to make staking more resilient while dramatically reducing technical complexity for large ETH holders. DVT enables validators to operate across multiple machines rather than relying on a single node. In existing implementations, a validator’s cryptographic key is split across multiple nodes that collectively sign messages. As long as more than two-thirds of those nodes behave honestly, the validator continues to operate normally without risking penalties such as slashing or inactivity leaks. While DVT is already in use in some protocols today, Buterin argues that these solutions remain difficult to set up and maintain. They often require complex inter-node networking and depend on cryptographic properties that may not be suitable in the long term.Buterin’s proposal replaces that complexity with a protocol-level solution. Instead of relying on external coordination layers, Ethereum itself would support validators that operate as groups. — Margaux Nijkerk Read more.

SOLAYER UNVEILS $35M FUND: Solayer unveiled a $35 million ecosystem fund to back blockchain applications built on its infiniSVM network, targeting projects that require real-time execution and can generate sustainable revenue. The capital comes from Solayer Labs and the Solayer Foundation. The fund will support early and growth-stage teams building on infiniSVM, a layer-1 blockchain compatible with Solana’s tooling but designed for faster execution and near-instant settlement. Solayer said the network has demonstrated throughput above 330,000 transactions per second and finality of roughly 400 milliseconds. “We’re solving for real-time behavior, immediate, guaranteed settlement and low latency,” said Joshua Sum, Solayer’s chief product officer, in an interview with CoinDesk. “Most blockchains still batch transactions, like legacy financial systems. We want to replace that with actual real-time clearing.” - Olivier Acuna Read more.

In Other News

• Galaxy Digital (GLXY), the digital asset investment firm led by Mike Novogratz, is working on a $100 million hedge fund aimed at profiting from the turbulence roiling the digital assets and fintech industries, the Financial Times reported. The fund, expected to start up in the first quarter, will take both long and short positions, meaning it plans to make money both when prices go up and when they fall, the FT said. About 30% of the capital will be allocated to crypto tokens. The rest will target financial services stocks Galaxy believes are being reshaped by digital asset technologies and shifting regulations. It has secured backing from family offices, high-net-worth individuals, and institutions, and is also seeding the fund with an undisclosed amount. — Francisco Rodrigues Read more.
• Cryptocurrency’s security story is changing, and not in the way most investors expect or would like to, as while crypto losses are on the rise, so too is onchain security. Even as 2025 went down as the worst year for hacks on record, the biggest failures weren’t born onchain; instead, they were operational. Passwords, keys, compromised devices, manipulated employees, fake support agents. Human error, not broken code. “Despite 2025 being the worst year for hacks on record, those hacks stem from Web2 operational failures, not onchain code,” Mitchell Amador, CEO of onchain security platform Immunefi, told CoinDesk in an exclusive interview. That distinction matters, Amador said, because it suggests something counterintuitive: onchain security is improving, even as losses keep rising. “On-chain security is improving dramatically, and will continue to,” he said. “From the perspective of DeFi and onchain protocol code, I believe 2026 will be the best year yet for onchain security.” The direction of travel, in other words, is not necessarily toward weaker systems. It is toward more convincing, more sophisticated criminals, Amador suggested. His arguments align with Chainalysis’ 2026 Crypto Crime Report's findings. — Olivier Acuna Read more.

Regulatory and Policy

• Coinbase (COIN) CEO Brian Armstrong said his company decided to oppose a major digital assets bill at the last minute after discovering provisions that raised serious concerns for consumer protection and market competition, speaking in an interview with CNBC. "The high-level principle is that you can't really have banks come in and try and kill their competition at the expense of the American consumer," he told CNBC. Armstrong said Coinbase and other crypto firms had remained committed to negotiations until late in the process, but that a close review of the draft legislation, first published near midnight on Monday, revealed issues the company believed would have been damaging if the bill had advanced out of committee. He said the legislation, which ran hundreds of pages, contained elements that surprised industry participants, and it would not have been prudent to move forward without further changes. The U.S. Senate Banking Committee will no longer hold today's planned markup of its crypto market structure bill after crypto exchange Coinbase publicly withdrew its support for the legislation on Wednesday, compounding fractures in negotiations that had already left the measure on shaky ground. — Will Canny Read more.
• U.S. lawmakers were about to begin a hearing on a major crypto bill that aimed to define how federal regulators, such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), can oversee crypto markets, but the night before the hearing was about to start, Coinbase, one of the biggest crypto exchanges that has been deeply involved in the bill's negotiations and has spent millions lobbying for it, suddenly withdrew its support. This sent the whole industry into chaos. Just hours later, that same Wednesday evening, the U.S. Senate Banking Committee canceled the hearing on the crypto market structure bill — just over 12 hours before it was scheduled to kick off. Following the announcements, lawmakers relaunched talks on Friday, with Democrats and staffers holding a call with industry representatives. However, Coinbase was not alone in having issues with the bill. The general concern was that different provisions in the bill would make it more difficult for crypto startups to launch tokens or operate anything resembling a decentralized project. These concerns included how decentralized finance (DeFi) would be regulated, stablecoin yield provisions, disclosure requirements for certain cryptos treated as securities, restrictions on tokenized securities, and how the SEC would oversee those types of assets. Some provisions even risked forcing blockchains to become permissioned products, defeating the purpose of a decentralized ledger intended for public access. People also cited the lack of time to review the text and proposed amendments among their concerns. — Nikhilesh De Read more.

Calendar

• Feb. 10-12, 2026: Consensus, Hong Kong
• Feb. 17-21, 2026: EthDenver, Denver
• Feb. 23-24, 2026: NearCon, San Francisco
• Mar. 30-Apr. 2, 2026: EthCC, Cannes
• Apr.15-16, 2026: Paris Blockchain Week, Paris
• May 5-7, 2026: Consensus, Miami
• Nov. 3-6, 2026: Devcon, Mumbai
• Nov. 15-17, 2026: Solana Breakpoint, London