Ethereum liquid restaking protocol Puffer Finance reaches $200 million valuation in new token funding round

Puffer Finance, an Ethereum ETH -4.52% liquid restaking protocol built on EigenLayer, has raised $18 million in a Series A funding round co-led by Brevan Howard Digital and Electric Capital.

Other investors in the round included 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, Puffer Finance said Monday.

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.

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

Puffer's Series A round comes shortly after it raised funds from Binance Labs earlier this year. Last year, the project also raised a $5.5 million seed funding round and a $650,000 pre-seed round initially.

Ethereum restaking gaining further momentum

The Ethereum restaking vertical has been gaining momentum since the launch of EigenLayer last year. This led to the launch of several EigenLayer-based platforms this year. Puffer Finance is currently the third-largest liquid restaking protocol by total value locked (TVL) after Ether.Fi and Renzo, according to DeFiLlama data. Puffer currently has a TVL of $1.17 billion compared to Ether.Fi's $3.5 billion and Renzo's $2.95 billion.

With the Series A funding in place, Puffer Finance now aims to launch its mainnet, which it says will expand validator participation within Ethereum's ecosystem and enhance its decentralization. "By reducing the entry requirement to just 1 ETH for validators and enhancing their earnings through the integration of Ethereum's proof of staking with Actively Validated Services' (AVS') restaking yields, Puffer's mainnet sets a new standard for innovation in the liquid restaking landscape," the project said.

Puffer has previously also received a grant worth $120,000 from the Ethereum Foundation for its open-source tool called Secure-Signer. The tool allows Ethereum validators to reduce the risk of slashing or penalties.

Avichal Garg, co-founder and general partner at Electric Capital, said in a statement, "By lowering the barriers to entry and enhancing security measures, Puffer's technology ensures broader participation and strengthens the integrity of the network."

Peter Johnson, co-head of venture at Brevan Howard Digital, said in a statement that Puffer Finance is building "critical infrastructure that enhances the decentralization and security of Ethereum" and that BHD remains committed to "backing projects that are pivotal to the growth and resilience of the blockchain ecosystem."

(Updates to mention Avon Ventures)