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News/Puffer Finance Secures $18M, Reaches $200M Valuation in New Funding Round

Puffer Finance Secures $18M, Reaches $200M Valuation in New Funding Round

Van Thanh Le

Apr 16 2024

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Puffer Finance Raises $18M Amid Surging Liquid Staking Market

Puffer Finance, an Ethereum liquid restaking protocol built on EigenLayer, secured $18 million in a Series A funding round co-led by Brevan Howard Digital and Electric Capital. 

The investment round drew participation from Coinbase Ventures, Kraken Ventures, Franklin Templeton, Avon Ventures (a venture fund affiliated with FMR LLC, the parent company of Fidelity Investments), Mechanism Capital, Lightspeed Faction, Consensys, Animoca, GSR and Lemniscap. Angel investors, including Polygon co-founder Sandeep Nailwal, Wormhole co-founder Anthony Ramirez, AltLayer co-founder Yaoqi Jia and Pendle Finance core contributor Anton Buenavista, also joined the round.

Ethereum tokens flow into Puffer Finance, boosting decentralized finance market.webp

The round was structured as a simple agreement for future tokens (SAFT), bringing Puffer's fully diluted token valuation to $200 million, according to co-founder Amir Forouzani.

Puffer's Series A follows its earlier funding from Binance Labs this year, as well as a $5.5 million seed round and a $650,000 pre-seed round last year. The protocol hinted at forthcoming "technological advancements" after its mainnet launch, though specifics were not disclosed.

Puffer Finance's technology enables Ethereum validators to reduce their capital requirement from 32 ETH to just 1 ETH, lowering the barrier to entry for individual stakers. Users who stake Ether through Puffer receive Puffer liquid restaking tokens (nLRTs), which can be used to farm yields in other DeFi protocols alongside their Ethereum staking rewards.

Ethereum Restaking Gains Momentum

The Ethereum restaking vertical has been gaining momentum since EigenLayer's launch last year, leading to the emergence of several EigenLayer-based platforms in 2023. Puffer Finance is currently the third-largest liquid restaking protocol by total value locked (TVL), with $1.17 billion, after Ether.Fi ($3.5 billion) and Renzo ($2.95 billion).

Puffer co-founder Amir Forouzani stated the project's goal is to "significantly reduce the barriers for home validators to participate, while delivering the most advanced liquid restaking protocol."

With the Series A funding, Puffer Finance aims to launch its mainnet, which it says will expand validator participation and enhance Ethereum's decentralization. The project previously received a $120,000 grant from the Ethereum Foundation for its open-source Secure-Signer tool, which helps validators reduce slashing or penalty risks.

Avichal Garg, co-founder of Electric Capital, said Puffer's technology "ensures broader participation and strengthens the integrity of the network." Brevan Howard Digital's co-head of venture, Peter Johnson, expressed the firm's commitment to backing "projects that are pivotal to the growth and resilience of the blockchain ecosystem."

Conclusion

Puffer Finance, an Ethereum liquid staking protocol, secured $18 million in funding, reaching a $200 million valuation. This funding aims to launch Puffer's mainnet, which lowers the barrier to entry for staking Ethereum and strengthens network decentralization.

FAQs

What is Puffer Finance?

Puffer Finance is a protocol that allows users to stake Ethereum with a lower minimum amount than usual. Users receive liquid staking tokens representing their stake, which can be used in other DeFi applications while earning staking rewards.

Why is Puffer Finance raising funds?

Puffer Finance raised funds to launch its mainnet, which will streamline Ethereum staking and increase validator participation. This, in turn, strengthens the security and decentralization of the Ethereum network.

What are Puffer's advantages?

Puffer Finance allows users to stake Ethereum with only 1 ETH, compared to the usual 32 ETH requirement. Additionally, users can leverage their staked ETH in other DeFi applications through liquid staking tokens.

Who are the investors in Puffer Finance?

Puffer Finance's investors include Coinbase Ventures, Kraken Ventures, and angel investors like the co-founder of Polygon. This substantial backing highlights the project's potential in the liquid staking space.

This article has been refined and enhanced by ChatGPT.

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