Complete Gate Post tasks to upgrade your rank

Credit Ranking

[//]:content-type-MARKDOWN-DONOT-DELETE
![](https://gimg2.gateimg.com/image/article/1720576532sdfx.jpeg)
## [TL; DR]
With Puffer Finance <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> validators are now able to stake 1 ETH.

The Ethereum network will become more secure than before due to the participation of many validators.

Puffer Finance’s staking and restaking facility will generate greater yield for Ethereum stakers than before. 

## Introduction
Puffer Finance, operating on the Ethereum blockchain, is one of the leading platforms offering crypto staking and restaking services. The protocol has made it easier for stakers to participate in Ethereum’s validation process due to the reduction of the required staked ETH. This article discusses the technology which Puffer Finance uses to achieve its vision. We will also look at its contribution to the Ethereum ecosystem and the entire blockchain sector. 

## Puffer Finance’s Focus on Liquid Staking Derivatives (LSD): Its Contribution to the Ethereum Ecosystem
Puffer Finance, a [blockchain based project](https://www.gate.io/learn/articles/what-is-puffer-finance-all-you-need-to-know-about-pufeth/2330 "blockchain based project") built on Ethereum’s Eigenlayer protocol and focused on staking liquid derivatives (LSD), has partnered with the Ethereum Foundation to develop based rollups after securing $18 million in venture capital. Puffer Finance’s main aim is to launch its mainnet, a platform where stakers and validators will stake and restake their crypto assets. 

Based rollups are a technology for streamlining layer-1 blockchain operations by processing transactions off-chain, thereby reducing congestion and enhancing scalability. The rollups then bundle the transactions into a single finalized transaction. Puffer Finance, with a TVL of $1.7 billion, has been trending in the crypto news sector for its yield generation and decentralized validation provisions. 

In fact, Puffer Finance offers crypto investors a lucrative earning opportunity. It allows investors [to stake ETH and get staking and restaking yield in return](https://www.gate.io/learn/articles/staking-innovation-an-in-depth-look-at-puffer-finance/2981 "to stake ETH and get staking and restaking yield in return"). Thus, apart from staking ETH as the primary asset the investors can also restake the protocol’s Native Liquid Restaking Token (nLRT). Puff Finance’s nLRT known as pufETH uses ETH as a collateral rather than the traditional Liquid Staking Tokens (LSTs). As a result, the investors benefit from traditional PoS yields and restaking yields, [generated through Eigenlayer smart contracts](https://www.gate.io/learn/articles/puffer-finance-overcoming-the-centralization-dilemma-of-the-lst-lrt-track/3148 "generated through Eigenlayer smart contracts"). Also, note that the pufETH stakers earn rewards from protocols that have partnered with Puff Finance.  
## Puffer Finance’s Scaling Solution: Using Base Roll Ups and Sequencing 
Rollups and based sequencing form the basis of Puff Finance’s envisioned architecture which will enhance interoperability among smart contracts to reduce or eliminate liquidity fragmentation that is ruling the roost in the DeFi sector at the moment. Liquidity fragmentation refers to the existence of liquidity pools that are independent of each other in the DeFi sector. In other words, there is no consolidated and ease-to- access liquidity market in the industry. 

Amir Fourouzani, co-founder of Puffer Finance views liquidity fragmentation as one of the key challenges that exists in the DeFi sector. During an[ interview with Cointelegraph Fourouzani said](https://cointelegraph.com/news/ethereum-lsd-solution-puffer-finance-moves-to-base-rollups " interview with Cointelegraph Fourouzani said"), “Currently, there’s a challenge in the Ethereum ecosystem known as liquidity fragmentation. This issue arises from the fact that current L2 projects are each creating their own ‘super chains,’ leading to isolated pools of liquidity.”

The technology which some crypto projects like <a href="/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a>, Arbitrum, and ZKSync are using promote independent 'super chains' that segregate liquidity pools resulting in fragmentation. Thus, Puff Finance’s technology (based-sequencing and based rollups) has led to a DeFi revolution where appchains communicate and share liquidity. 

 Fourouzani added, “To address this, the industry needs solutions like based-sequencing and based rollups to ensure interoperability and communication between these chains.” To achieve this Fourouzani explained that Puff Finance devised a method of organizing pre-confirmations on Ethereum layers in a way that keeps the network decentralized. The collaboration between Ethereum Foundation and Puff Finance shows the two organizations’ commitment to enhance scalability and interoperability through based-sequencing and rollups.
 
Commenting on this development, [Fourouzani said](https://cointelegraph.com/news/ethereum-lsd-solution-puffer-finance-moves-to-base-rollups "Fourouzani said"), “It took us years to architect and come up with this, but now we have it. This is the current central area of research for the Ethereum Foundation. The thought leaders over there are trying to push this forward with leaders such as Justin Drake and others,”.
He also provided details of a possible scenario where protocols will share liquidity. “In the future, every company is going to have its host AppChain. Let’s say <a href="/price/aave-aave" target="_blank" class="blog_inner_link">Aave</a> has its own AppChain, and liquidation is going to hit Aave; well, it’s going to be represented on <a href="/price/uniswap-uni" target="_blank" class="blog_inner_link">Uniswap</a> immediately on Uniswap’s AppChain. This is the ultimate dream. Uniswap and Aave don’t have to go through any governance token or rely on any governance process.”

The same expert explained how interoperable app chains will enable the flourishing of yield farming within the Ethereum ecosystem. He said, “A lot of users would rather have their tokens generating yield with no effort in their wallets rather than just keeping it on the base chain.” The interoperability that the AppChain will enhance will make this possible. 

Read also: [How to Buy pufETH (PUFETH)](https://www.gate.io/how-to-buy/pufeth-pufeth "How to Buy pufETH (PUFETH)")

## Making What Seemed Impossible Possible: How Puffer Finance's LSD Technology Works 
Puffer Finance has another great innovation in the form of its LSD technology that enables Ethereum validators to stake only 1 ETH instead of 32 ETH. This technology allows the validators to earn Puffer liquid restaking tokens (nLRTs) thereby generating additional income. Therefore, the stakers can restake the nLRTs tokens and earn rewards for that. 

In its Medium post, [Puffer Finance said](https://medium.com/puffer-fi/introduction-to-puffer-finance-57f5483a5cee "Puffer Finance said"), “We significantly lower the entry barriers to run a validator; whereas a typical validator has to stake a 32 ETH bond to participate, Puffer enables anyone to operate a validator with as little as ‘1 ETH’. This reduced entry requirement enables Node Operators to achieve comparable yield potentials as traditional ETH stakers, enhancing their returns without significant initial investment, while simultaneously keeping Ethereum’s framework decentralized and robust.”

Read also: [The Hype of Restaking Narratives](https://www.gate.io/learn/articles/the-hype-of-restaking-narratives-what-are-the-restaking-projects-beyond-the-ethereum-ecosystem/1699 "The Hype of Restaking Narratives")
## Puffer Finance's future in the Ethereum ecosystem and DeFi
Puffer Finance has much to offer to the Ethereum ecosystem. First, by reducing the capital requirements for Ethereum validators it promotes the decentralization nature of the network. The reason is that many validators will participate in the network. 

The increase in the number of validators will further strengthen its security and integrity. Regarding this [Puff Finance said](https://medium.com/puffer-fi/introduction-to-puffer-finance-57f5483a5cee "Puff Finance said"), “let’s underscore our core mission: to enhance, secure and decentralize the Ethereum ecosystem through innovative restaking solutions.”

It continued, “Puffer is not just about offering a platform for staking; we’re setting new standards in how Ethereum’s network operates, ensuring it remains robust, decentralized, and profitable. By integrating native [restaking on EigenLayer](https://www.gate.io/learn/articles/why-has-re-staking-dominated-social-media/2075 "restaking on EigenLayer"), we expand viable revenue streams for node operators and stakers alike, ensuring that everyone involved enjoys enhanced rewards and greater security.”

Read also more about [Staking, Restaking, and LRTfi](https://www.gate.io/learn/articles/staking-restaking-and-lrtfi/2003 "Staking, Restaking, and LRTfi")
## Conclusion 
Puffer Finance has much to offer to the Ethereum ecosystem and the DeFi sector in general. For example, it has created room for many people to invest in ETH and the DeFi sector. Many investors can now become validators thanks to Puff Finance that enables them to participate in the validation process through staking only 1 ETH. The Ethereum network will also become more secure than before due to the active involvement of many validators.

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>


简体中文

English

Tiếng Việt

Español

Русский язык

Français

ภาษาไทย

日本語

Indonesia

Deutsch

عربي

Português (Portugal]

Português (Brasil]

繁體中文

Українська

Puffer Finance’s LSD technology enables Ethereum validators to stake only 1 ETH instead of 32 ETH.

福利中心

小红花-Learn & Explore-博客

小红花-Learn & Explore-快讯

币圈-币圈-未来事件

小红花-Learn & Explore-聊天室

小红花-Learn & Explore-直播

小红花-Learn & Explore-动态

币圈

Gate OTC

芝麻金融-更多-财富管理

机构-APIs

机构-大宗交易服务

机构-经纪商项目

全球做市商计划

机构-托管和资产管理

机构借贷

机构-做市商项目

小红花-Promotions-机构和VIP服务

量化基金

机构-基础架构

机构-交易

机构-金融

结构化产品

机构-主页

衍生品-统一账户

芝麻金融-更多-抵押借币

vip服务

机构

策略跟单

现货跟单

交易-合约跟单

跟单

量化策略-探索

量化策略-进阶

量化策略-基础

交易-机器人广场

创建机器人

探索机器人

杠杆网格

无限网格

期现套利

组合指标策略

智能调仓

现货马丁格尔

合约网格

现货网格

交易机器人

芝麻金融-更多-ETH2.0挖矿

芝麻金融-更多-法币理财

链上赚币

芝麻金融-理财-双币宝

芝麻金融-理财-定期理财(屯币)

芝麻金融-理财-结构性理财

芝麻金融-理财-理财宝

芝麻金融-理财-余币宝

GT挖矿

芝麻金融-更多（理财产品）

芝麻金融-理财（打新）

launchpool

launchpad

赚币-HODLer Airdrop

candy_drop

web3 Airdrop

赚币

模拟交易

衍生品-期权

衍生品-交割合约

衍生品-永续合约

合约入门

合约活动

衍生品

交易-杠杆ETF

交易-杠杆交易

交易-闪兑

交易-现货交易

交易-创新交易

交易-交易工具

交易-交易类型

交易-盘前交易

交易

行情

买币-gateCard

卖币

买币-快捷交易

买币

买币-paywith

法币定投

小红花-推广

新手指南

活动中心

小红花-Learn & Explore-学院

小红花-Exchange-最新公告

小红花-Exchange-帮助中心

gate商店

小红花-Promotions-邀请计划

小红花-promotions-代理商

储备金

合作伙伴

cextg小程序

小红花

web3

 Puffer Finance's Innovative Leap: Bridging Ethereum's Liquidity Gaps with Base Rollups