Analysis: The massive amount of ETH queued for unstaking may be related to the sudden decrease in Ethereum supply on Aave, and if the situation worsens, it could lead to stETH losing its peg.

On July 23, the crypto KOL darkpools analyzed in a post on social media that the recent queue of 620,000 ETH for unstaking may be due to: "Whales withdrawing ETH deposits from Aave (reducing ETH supply), causing the utilization rate of ETH on Aave to skyrocket, leading to a significant rise in ETH lending interest rates; users using stETH for looping have become unprofitable due to high costs and are starting to de-leverage; a large amount of de-leveraged stETH has entered the staking withdrawal queue; some users choose to sell stETH directly to avoid the withdrawal queue, causing stETH to depeg by 30 basis points (0.3%). The remaining loopers are faced with a dilemma: either accept the 30 basis points discount (which translates to a 3% loss under 10x leverage) or continue holding and bear interest losses until stETH re-pegs. Since the oracle price of stETH is based on the redemption value rather than the market price, lenders are currently stuck in their positions and may need to wait up to about 18 days—this is the current unstaking queue time for ETH. If the situation continues to deteriorate, there may also be liquidations triggered by accumulated interest on stETH, which will further suppress the peg of stETH and worsen the situation.