Summary
Puffer Finance, a liquid restaking protocol, saw its total value locked (TVL) surge to $194 million within one day of launching. Puffer Finance rewards users for converting Lido’s stETH token into its liquid restaking token, pufETH. The liquid restaking token (LRT) sector has grown rapidly, with a TVL of over $1 billion, up from less than $50 million in November. LRTs offer the same benefits as liquid staking tokens (LSTs), such as earning staking rewards without running an Ethereum node, but also provide additional rewards through native restaking on EigenLayer. Leading LRT protocols include EtherFi, Kelp DAO, and Renzo. These protocols are also expanding to new chains, such as Polygon and BNB Chain.
Key Points
1. Puffer Finance has quickly become the third-largest Liquid Restaking Token (LRT) protocol, achieving a total value locked (TVL) of $194M within one day of its launch.
2. LRTs like Puffer Finance’s pufETH provide tokenholders with the ability to earn staking rewards without running an Ethereum node, while also allowing them to remain liquid and use the tokens in DeFi for additional yield or instant selling.
3. The LRT sector has experienced significant growth recently, with leading protocols such as EtherFi, Kelp DAO, and Renzo amassing a combined TVL of $1.25B, accounting for 59.5% of EigenLayer’s $2.1B TVL. Additionally, these protocols are expanding to new chains like Polygon and BNB Chain to bring the LRT strategy to a wider audience.