Puffer Finance, a project developed on the Ethereum restaking protocol Eigenlayer, has successfully raised $18 million in a Series A funding round to launch its mainnet. The funding round was led by Brevan Howard Digital and Electric Capital, with notable investments from Coinbase Ventures, Kraken Ventures, Lemniscap, Franklin Templeton, Fidelity, Mechanism, Lightspeed Faction, Consensys, Animoca, GSR, and other angel investors.
According to DefiLlama data, shortly after its initial testing phase in February, Puffer Finance achieved a total value locked (TVL) of $1.2 billion. So far, the protocol has raised a total of $23.5 million in venture capital funding.
Puffer Finance stated in its announcement that following the funding round, it secured a strategic investment from Binance Labs, strengthening its position within the Liquid Restaking ecosystem. The project also hinted at “technological advancements” alongside the launch of its mainnet.
Puffer Finance’s technology allows Ethereum validators to reduce their capital requirement to just 1 Ether (ETH), compared to the 32 ETH typically required for individual stakers. Additionally, users who stake Ether through Puffer receive Puffer liquid restaking tokens (nLRTs), which can be used to earn yields in other decentralized finance protocols simultaneously with their Ethereum staking rewards.
Liquid staking, a process already employed by blockchains like Cosmos, has recently been introduced to Ethereum after the network’s transition to proof-of-stake through the Merge upgrade. Puffer Labs’ core contributor, Amir Forouzani, expressed the goal of significantly reducing barriers for home validators to participate while delivering an advanced liquid restaking protocol.
In March, EigenLayer surpassed decentralized finance lending protocol Aave in TVL, with $10.4 billion worth of crypto committed to the protocol after temporarily removing a staking cap. Dune Analytics data reveals that EigenLayer has over 107,900 unique depositors, and DefiLlama statistics show that 74% of staked tokens are Wrapped Ether (wETH) and Lido Staked Eth (stETH).
Liquid staking protocols currently represent the largest category in the DeFi ecosystem, with approximately $55 billion in locked value across around 160 protocols. This is largely driven by Lido, the leading protocol with $35 billion in locked value.
In related news, the restaking protocol EigenLayer has partially launched on the Ethereum mainnet.