Puffer Finance, a blockchain infrastructure company, has announced the successful closure of its seed round, raising a total of $5.5 million USD. The round was co-led by Lemniscap and Lightspeed Faction, with participation from Brevan Howard Digital, Bankless Ventures, Animoca Ventures, DACM, LBK, SNZ and Canonical Crypto.
The funding will be leveraged to accelerate the development of Puffer’s open-source Secure-Signer solution for the public good, and to create a capital-efficient permissionless staking pool.
Puffer recognizes the inherent challenges validators face in the Ethereum Proof of Stake (PoS) network, particularly the risk of losing all of their staked ETH to slashing penalties resulting from software bugs or user errors. This carries significant risk for solo stakers without access to substantial amounts of ETH, discouraging small-scale participation and increasing the appeal of centralized services.
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Puffer’s open-source project Secure-Signer is a remote signing tool designed to prevent Ethereum validators from committing slashable offenses, limiting access to validator keys in order to mitigate the effect of software bugs and user errors while simultaneously protecting them from costly penalties that disproportionately impact solo stakers. Secure-Signer previously received support from the Ethereum Foundation in the form of a $120k grant, underscoring its importance within the Ethereum ecosystem.
Additionally, Puffer Finance is actively working on a protocol to lower the barrier of entry for at-home stakers and to help them unlock additional rewards, providing a financially viable alternative to centralized Liquid Staking Providers (LSPs), whose economies of scale can otherwise provide greater rewards by addressing the issue of inactivity penalties and implementing innovative anti-slashing technology. The protocol will effectively reduce the bond requirement from 32 ETH to just 2 ETH.
Other participants in Puffer’s seed round include community funds such as 33DAO, WAGMI33, and Concave, as well as angel investors including DiscusFish, Co-founder of F2Pool & Cobo; Sreeram Kannan, Founder of Eigen layer; Frederick Allen, Staking Sales Lead at Coinbase Institutional; Calvin Liu, Head of Strategy at Eigen Layer; Ramble, Founder of the North American Blockchain Association; Mr.Block: Core Contributor at Curve; Ladislaus von Daniels, Staking Educator, Richard Malone, Head of Business at Obol Labs.
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Puffer’s seed round follows an initial $650K raise in a pre-seed round led by Jump Crypto, and supported by IoTeX, Acanam Capital.
Commenting on the announcement, Amir Forouzani, and Jason Vranek, Founders of Puffer Finance, said: “The rapid advancements in infrastructure and user experience have primed Ethereum for mass adoption. As this era ushers in new centralization pressures, preserving Ethereum’s core values becomes increasingly essential. We hope the Puffer Protocol will create a pocket within the validator set where decentralization can thrive. By lowering barriers to entry, anyone can run a Puffer Node from their home to operate Web3 infrastructure and play a pivotal role in shaping a Web3 that is resilient and censorship-resistant. We want to express our utmost gratitude to our investors for their trust, support, and partnership. Together and with our community, we will build a flourishing ecosystem true to the values that made Ethereum so special.”
Justin Drake, Researcher at the Ethereum Foundation, said: “Validator operators should consider Puffer’s SGX-based secure signer – at least until we get one-shot signatures. Zooming out, enclaves are a great way to incrementally improve security whenever pure cryptoeconomic defences fall short.”
Roderik van der Graaf, Founder of Lemniscap, said: “The Puffer team is spearheading the development of sophisticated technological solutions geared towards reducing centralisation pressures on Ethereum. Puffer’s proprietary Secure-Signer solution greatly mitigates operational risks associated with user errors and client bugs, providing best-in-class security for validators. The solution’s low capital requirement of 2 ETH is a game changer in terms of broadening the accessibility of revenue streams for at-home stakers, encouraging new swathes of ecosystem participants to stake their claim in the burgeoning sector.”
Samuel Harrison, Managing Partner of Faction, said: “Through software defined security, Puffer enables lower fees for users and higher ROI for node operators, whilst enabling a more decentralized and fragmented validator ecosystem. This advancement is beneficial for the entire space.”
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