Binance Labs Invests In Bringing Ethereum Restaking To BNB Chain

Binance Labs, the venture capital arm of the leading centralized exchange, announced an investment in Puffer, a project bringing Ethereum liquid restaking onto BNB Chain.

The funds will be used to build out Puffer’s infrastructure, open-source technology, and Layer 2 network. Puffer’s L2 will be secured by EigenLayer, the pioneering restaking protocol, operating as an actively validated service (AVS).

“Puffer will bring its native liquid restaking token (nLRT) to BNB Chain users so they can earn Ethereum PoS and restaking rewards,” Binance said. “Puffer aims to democratize Ethereum staking by reducing operational risks and costs associated with validating, making it viable for at-home validators.”

Liquid restaking propels EigenLayer growth

Puffer aims to become the first project to bring ETH restaking yields onto a network outside of the Ethereum ecosystem.

ETH restaking yields are derived from EigenLayer, which allows users to generate income by validating third-party AVSs that are secured by EigenLayer while simultaneously earning Ethereum staking rewards. Users can either natively restaking ETH without limit or deposit liquid staking tokens (LSTs) to EigenLayer’s capped pools.

Liquid restaking tokens allow tokenholders to earn restaking yields without spinning up an Ethereum node and without locking up funds — meaning users can side-step EigenLayer’s seven-day withdrawal delay by selling their tokens when exiting a position — reducing the technical barriers and frictions associated with accessing restaking yields.

The emergence of liquid restaking tokens coupled with EigenLayer recently increasing its LST pool limits have propelled EigenLayer to a more than $2B total value locked (TVL) after sitting at $252M in mid-December, according to DeFi Llama. Natively restaked Ether currently accounts for $986.3M or 48% of the total, with liquid restaking tokens representing around $900M combined.