Puffer Finance, an Ethereum-based project that focuses on liquid staking derivatives (LSD), has announced a partnership with the Ethereum Foundation to collaborate on the development of based rollups. This comes after the project recently raised $18 million in a Series A funding round and is now preparing to launch its mainnet.
Based rollups are a scaling solution that aims to alleviate the strain on layer-1 blockchains by processing transactions offchain. These transactions are then bundled together and finalized on the base layer. In an interview with Cointelegraph, Amir Fourouzani, co-founder of Puffer Finance, discussed the growing demand for such solutions in the market.
Fourouzani emphasized the need for interoperability and communication between different chains, and stated that Puffer Finance has found a way to organize pre-confirmations on Ethereum layers while maintaining decentralization among validators. He added that the project has been working on this solution for years and is now ready to implement it. He also praised the efforts of thought leaders at the Ethereum Foundation, including Justin Drake, in pushing this technology forward.
The co-founder highlighted the benefits of based rollups in the decentralized finance (DeFi) space. He mentioned that an interoperable ecosystem of app chains allows users to generate yields effortlessly, rather than just holding tokens on the base chain.
Puffer Finance has already achieved significant success, with a total value locked (TVL) of $1.7 billion shortly after its early test phase in February, according to data from DefiLlama. The project has raised a total of $23.5 million in venture capital funding.
The current LSD technology developed by Puffer Finance enables Ethereum validators to reduce their capital requirement from 32 ETH to just 1 ETH. Additionally, users who stake Ether through Puffer Finance receive Puffer liquid restaking tokens (nLRTs), which can be used to farm yields in other DeFi protocols alongside their Ethereum staking rewards.
In related news, EigenLayer, the underlying protocol of Puffer Finance, has enhanced its EigenDA security to combat Sybil attacks.