Exploring Puffer Finance (PUFFER): The Native Liquid Restaking Protocol

What is Puffer?

Introduction to the Puffer

Puffer Finance is a native liquid restaking protocol built on the EigenLayer foundation, aimed at enhancing Ethereum’s Proof-of-Stake (PoS) performance and diversity. With Puffer, individuals can become validators with as little as 1 ETH, increasing the accessibility and decentralization of native restaking. Users can stake ETH and receive the platform’s native token, pufETH, to earn additional rewards through Ethereum’s PoS and restaking mechanisms. The protocol utilizes an advanced slashing mechanism to protect staked assets and employs capital-efficient strategies to maximize returns.

Key Mechanisms of Puffer

To briefly explain the difference between liquid staking and liquid restaking:

Comparison of Liquid Staking and Liquid Restaking

Liquid staking refers to the process of tokenizing staked assets. For example, when users stake ETH on platforms like Lido, they receive stETH. Liquid staking tokens (LSTs) such as stETH allow users to contribute to network security without sacrificing liquidity. After completing native ETH staking, users can use LSTs on other platforms.
EigenLayer introduces the concept of “restaking” on Ethereum. It allows ETH already staked on Ethereum to be restaked on other Layer-2 protocols, providing additional security to various decentralized services on Ethereum and earning extra rewards. Liquid staking secures PoS blockchain networks, while liquid restaking provides security for external modular systems like oracles.

Native Liquid Restaking Protocol

Puffer operates as a native liquid restaking protocol built on EigenLayer:

• Native: Puffer exclusively uses native ETH.
• Liquidity: For every 1 ETH staked on Puffer, users receive 1 pufETH, which can be used in other decentralized apps (DApps), ensuring sufficient liquidity.
• Restaking: The liquid restaking mechanism allows users to stake their ETH in Puffer, which is then used as collateral for EigenLayer services.
  Puffer’s native liquid restaking mechanism allows validators to retain their status and earn rewards while utilizing their staked pufETH for other activities, enhancing both security and capital efficiency.

Operating Process

Puffer’s mechanism works by having stakers provide ETH to node operators (NoOps) to support network consensus. The node operators earn PoS rewards and pass a portion of the ETH to restaking operators (ReOps). ReOps restake the ETH, earning additional rewards, which are partially returned to the NoOps. NoOps, in turn, reward the stakers, creating a continuous reward cycle.

Secure-Signer and RAVe Slashing Technologies

Puffer Finance leverages innovative slashing protection mechanisms—Secure-Signer (a remote signing tool) and RAV (Remote Attestation Verification) technology—to mitigate slashing risks in both the Ethereum and EigenLayer networks, offering participants low-risk, dual-layer returns.

• Secure-Signer is a remote signing tool that manages validator keys on behalf of consensus clients and can run both locally and on remote servers.
• RAVe ensures the permissionless operation of the Puffer protocol, allowing it to prove to user devices that a privacy-protecting program is running, ensuring high-integrity, confidential off-chain computations.

Puffer Funding Background

June 1, 2022: Puffer completed a $650,000 pre-seed round.
August 8, 2023: Puffer raised $5.5 million in a seed round.
April 16, 2024: Puffer closed an $18 million Series A round led by Brevan Howard Digital and Electric Capital, with participation from Coinbase Ventures, Kraken Ventures, and others.
Additionally, the project has received support from the Ethereum Foundation.

Puffer Tokenomics

$PUFFER: Governance Token

$PUFFER is the key governance token in the Puffer and UniFi ecosystems and plays several important roles:

1. Governance Participation: $PUFFER holders can influence the development of Puffer LRT, Puffer UniFi, and UniFi AVS. Specifically, holders will participate in deciding key protocol parameters (e.g., fees, limits, bond requirements) and selecting guardians.
2. Reward Management: The three main products of the Puffer ecosystem—Puffer LRT, UniFi AVS, and UniFi Rollup—generate rewards. Token holders will manage these rewards, ensuring they are used effectively to support ecosystem growth and technological innovation.
3. Driving Decentralization: $PUFFER is designed to promote decentralized governance within the Puffer ecosystem. Through the introduction of the vePUFFER governance mechanism, users can lock their $PUFFER tokens to earn vePUFFER NFTs and accumulate voting power. This mechanism rewards long-term participation while providing users with flexibility to unlock their tokens at any time. This setup encourages sustained community engagement while ensuring personal asset liquidity.

Token Distribution

The total supply of $PUFFER is 1 billion (initial supply is 102,300,000 tokens).

• Airdrop Rewards: 13%
• Ecosystem and Community: 40%
• Support for Ethereum Development: 1%
• Early Contributors: 20%
• Investors: 26%
  

How to Claim Airdrop

7.5% of the $PUFFER supply will be allocated to the Crunchy Carrot Quest Season 1 airdrop. The airdrop claim period is from October 14, 2024, to January 14, 2025, with eligibility snapshots taken on October 5, 2024. To claim, visit the official Puffer claim website: https://claims.puffer.fi
Crunchy Carrot Quest Season 2 is also underway, with 5.5% of airdrop tokens available for rewards: https://quest.puffer.fi

Gate.com to List PUFFER and Launch PUFFER Startup Mining

PUFFER Listing

Gate.com is going to commence Puffer (PUFFER) trading at 12:00 PM on October 14th (UTC), 2024.

PUFFER Startup Mining

In celebration of the upcoming listing, Gate.com will also launch Startup Mining for $PUFFER at 12:00 PM on October 14th (UTC), sharing 1,500,000 PUFFER (PUFFER Staking Pool: 600,000 PUFFER, “Single-Coin Multi-Mining” GT Pool: 900,000 PUFFER).

Startup Mining is a platform where users can stake their assets or provide liquidity to earn rewards in new project tokens. Users can lock specified tokens in the Startup Mining pool to receive corresponding project token rewards.
For more details on Gate.com PUFFER Startup Mining, see the event announcement: https://www.Gate.com/announcements/article/39794