To deploy its mainnet, Puffer Finance, a liquid staking business based on the Ethereum restaking technology Eigenlayer, has raised $18 million in a Series A fundraising round.
The statement dated April 16 states that Brevan Howard Digital and Electric Capital led the round, with significant contributions from additional angel investors as well as Coinbase Ventures, Kraken Ventures, Lemniscap, Franklin Templeton, Fidelity, Mechanism, Lightspeed Faction, Consensys, Animoca, and GSR.
Puffer Finance surpassed a total value locked of $1.2 billion quickly after its early test phase in February, according to statistics from DeFiLlama. Venture capital funding totaling $23.5 million has been raised for the protocol thus far.
In its statement, Puffer Finance mentioned "technological advancements" in conjunction with its mainnet debut and stated, "Following this round, Puffer secured a strategic investment from Binance Labs, enhancing its position within the Liquid Restaking ecosystem."
With the help of Puffer Finance's technology, Ethereum validators can now have far less capital—just 1 Ether ETH instead of the 32 ETH needed for individual stakers. Furthermore, Puffer liquid restaking tokens (nLRTs) are awarded to users who stake Ethereum using Puffer. These tokens can be used to farm yields in other decentralized finance protocols in addition to receiving Ethereum staking rewards.
Liquid staking, as it is called, has been around for a while on other blockchains, such Cosmos. It was only recently implemented on Ethereum with the Merge upgrade, which made the network proof-of-stake. Amir Forouzani, a core contributor at Puffer Labs, stated in a press release, "We aim to significantly reduce the barriers for home validators to participate, while delivering the most advanced liquid restaking protocol."
After temporarily eliminating a cap on the amount of cryptocurrency users could stake, EigenLayer quickly surpassed DeFi lending protocol Aave in terms of total value locked (TVL), with $10.4 billion worth of cryptocurrency committed to the network.
EigenLayer has around 107,900 unique depositors, according to Dune Analytics data, and DefiLlama statistics suggest that 74% of staked tokens are Wrapped Ether (wETH) and stETH. With over $55 billion in locked value spread across roughly 160 protocols, liquid staking protocols are now the largest category of DeFi protocols. Lido, with $35 billion in locked value, is the largest protocol in this category.
April 2024, Cryptoniteuae