Last week, Binance launched a new round of Launchpad projects, Scroll, but due to insufficient airdrop rewards and distribution, it has caused a lot of user dissatisfaction. The market originally expected Binance to list the token of the Puffer Finance staking platform, although it was ultimately not realized, but I believe that in the near future, we will see this project in Binance's activities. This is because the team and technical strength behind Puffer Finance have great potential, and its project blueprint is in line with the core narrative of the current bull market. This article will introduce the technology, team and potential market opportunities of Puffer Finance in depth, providing an opportunity for everyone to deploy in advance.
Project Background
Puffer Finance is a decentralized native Liquid Restake Protocol based on the EigenLayer architecture, which provides Ethereum PoS rewards and Restaking rewards to stakers through its native Liquid Restaking token (pufETH). The project uses anti-dilution technology to reduce risks and improve capital efficiency, generating additional income through local Restaking.
Puffer Finance further proposes the concept of UniFi Based Rollup, aiming to solve the current problems of Ethereum Layer 2 (L2) liquidity fragmentation and high cross-L2 transfer costs. This not only enhances the economic security of Ethereum, but also makes the entire transaction process more secure and efficient.
Project Team and Investment Lineup
Puffer Finance was founded by two founders from the University of California, Amir Forouzani and Jason Vranek, and Jason Vranek previously worked at the well-known oracle project Chainlink, which makes the team highly anticipated in terms of technical strength.
The project has raised $18 million in funding, with a valuation of $200 million. In addition to the core team, I believe that Puffer Finance's investment lineup, early investors and advisory team are also very powerful and have a huge influence in the industry. Investors include large centralized exchanges such as Binance, Coinbase, and Kraken, as well as well-known venture capital firms such as Franklin Templeton, Mechanism Capital, Jump, and SNZ. In addition, Puffer Finance's angel investors and advisory team are also very strong, including members such as Justin Drake, Andrew Kang, Jason Chen, and DiscusFish from the Ethereum Foundation. These factors demonstrate the project's deep industry resources and support, which I believe is also the reason why it can achieve a $200 million market value.
Problems Solved by the Project
The core goal of Puffer Finance is to solve the problem of the high threshold for Ethereum mainnet validators. Currently, becoming an Ethereum mainnet validator requires staking 32 ETH, which makes many potential participants hesitant. Puffer Finance uses its technology to lower this threshold to 1-2 ETH, allowing more users to participate in staking and earn rewards.
Compared to Lido's staking annual yield of around 3%, Puffer Finance offers higher annual returns, including not only PoS rewards, but also additional income from Restaking. By using the native liquid restaking protocol on EigenLayer, Puffer Finance can utilize the staked funds more fully and generate additional reward income. In addition, users also have the opportunity to receive airdrop rewards from Puffer Finance and other AVS projects. This mechanism allows Puffer Finance's investors to benefit in multiple ways, truly achieving a "one fish, multiple meals" effect, enhancing its attractiveness.
I believe that even after the project distributes tokens, it can maintain its popularity, because Puffer can provide a higher annualized rate than Lido, attracting users to stake. Although the TVL may be affected to a certain extent in the short term after the token distribution, when observed from a long-term perspective, I believe Puffer Finance can also maintain its performance, because the project is solving a number of problems related to Ethereum that are currently difficult to solve, including the staking threshold, liquidity fragmentation, and the utilization of staked funds.
Project Technology - Puffer Staking Protocol
One of the core features of the project is its unique Staking mode, where Puffer Finance has established its own Puffer Protocol to operate the entire staking process.
The Puffer Protocol first establishes different PufferModules, including Restaking Operators, Restaking AVS, and running smart contracts. When users choose to stake Ether on Puffer Finance, Puffer Finance will mint pufETH (pufETH is the native liquid restaking ERC-20 protocol token of Puffer Finance, which will use the income from PoS and Restaking for settlement). If users want to become validators, they can also become NoOps roles on the Puffer Protocol, apply for and perform ETH staking allocation to receive PoS rewards.
Puffer Finance's innovation allows stakers without 32 ETH to also become validators. The project utilizes Validator Tickets technology, where when a staker wants to become a validator, Puffer Finance will mint $VT for the user, representing the user's long-term commitment to running a validator in the module. At the same time, Puffer Finance will deposit the user's funds into the Puffer Vault, and when the Puffer Vault is combined with 32 ETH, it will become a validator on the mainnet, and Puffer Finance will distribute the PoS rewards to the $VT holders. This Validator Ticket concept is similar to a pooling mechanism, where everyone's funds are pooled together and the PoS and Restaking income rewards are shared.
Project Technology - UniFi Based Rollup
Puffer UniFi is an Ethereum-based Rollup solution specifically designed to solve the "fragmentation" problem in the current Ethereum scaling plans. Although the current Ethereum system's Layer 2 (L2) solutions have increased transaction speed and reduced costs, the funds and applications between different L2s cannot interact smoothly, leading to scattered liquidity and increasing the complexity of operations for users and developers.
Puffer UniFi solves these problems through "Based Sequencing" technology. This technology relies on decentralized Ethereum validators to order transactions, rather than using a centralized ordering system, which is not only more secure, but also avoids the potential fee exploitation of monopoly. Puffer UniFi also introduces a pre-confirmation mechanism, allowing transactions to be confirmed in about 100 milliseconds and achieving fee-free transactions, improving the user experience.
Puffer UniFi has also established an "ecosystem based on application chains", allowing developers to create their own application chains, which can interact seamlessly with each other, sharing liquidity and users, reducing the risks and costs of cross-chain operations. This model not only enhances the flexibility of applications, but also allows application chains to share the resources of the entire ecosystem, achieving a "synergistic effect" and avoiding the negative impact of competition.
For developers, Puffer UniFi provides several key benefits: developers can directly capture the transaction fees generated by their applications, reducing the complexity of operations and management, and the process of deploying application chains is very simple. In addition, the interoperability between application chains allows developers to more easily expand their user and capital base, without having to worry about liquidity issues.
Personal Perspective
Puffer Finance has demonstrated its strong capabilities in technology, resources, and market potential. The project not only solves the threshold problem of Ethereum staking, but also achieves higher yields and more flexible capital utilization through innovative technology. Although the concept of reStaking is controversial, I believe Puffer Finance has taken multiple measures to ensure the security of funds, such as conducting multiple contract audits and collaborating with multiple security partners.
In addition, during the recent EIGEN token airdrop, there were issues due to inaccurate data provided by zkLink Nova, resulting in the loss of some short-term $EIGEN rewards. Subsequently, Puffer Finance officially announced that they have purchased $EIGEN from the market to ensure that all users will receive the full $EIGEN airdrop rewards, and users can claim them through a designated link.
Furthermore, the team has also committed in the whitepaper to limiting their validator market share to 22% of the Ethereum validator set, ensuring that the Puffer protocol will never exceed the 33% dangerous consensus threshold.
Considering Puffer Finance's strong team, technical capabilities, and its groundbreaking contributions to solving Ethereum ecosystem problems, I believe Puffer Finance will become a well-known project with significant discussion. The project has already launched its mainnet, and the UniFi mainnet will be released later. Let's look forward to Puffer Finance's performance during the upcoming bull market. I believe Puffer Finance has the potential to become a trending project in the upcoming bull market, and may even achieve a 10x or 50x token growth.
