Puffer Finance, a project built 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 participation from Coinbase Ventures, Kraken Ventures, Lemniscap, Franklin Templeton, Fidelity, Mechanism, Lightspeed Faction, Consensys, Animoca, GSR, and other angel investors.
Puffer Finance achieved a total value locked (TVL) of $1.2 billion shortly after its early test phase in February, according to DefiLlama data. In total, the protocol has raised $23.5 million in venture capital funding.
Following the funding round, Puffer Finance secured a strategic investment from Binance Labs, further solidifying its position within the Liquid Restaking ecosystem. The project hinted at “technological advancements” in conjunction with its mainnet launch.
Puffer Finance’s technology enables Ethereum validators to reduce their capital requirement to just 1 Ether (ETH), instead of the usual 32 ETH. Users who stake Ether through Puffer Finance receive Puffer liquid restaking tokens (nLRTs), which can be used to earn yields in other decentralized finance protocols alongside their Ethereum staking rewards.
Liquid staking, a practice that has been widely adopted by other blockchains like Cosmos, has recently made its way to Ethereum after the network’s transition to proof-of-stake through the Merge upgrade. Puffer Labs aims to lower the barriers for home validators to participate while offering an advanced liquid restaking protocol, as stated by Amir Forouzani, a core contributor at Puffer Labs.
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 the staking cap. Dune Analytics data shows that EigenLayer has over 107,900 unique depositors, and DefiLlama stats indicate that 74% of staked tokens are Wrapped Ether (wETH) and Lido Staked Eth (stETH).
Currently, liquid staking protocols represent the largest category of DeFi protocols, with approximately $55 billion locked across about 160 protocols. Lido is the leading protocol in terms of locked value, with $35 billion.
In related news, the restaking protocol EigenLayer has partially launched on the Ethereum mainnet.