Puffer Finance proposes listing pufETH as collateral on Compound’s Ethereum markets. pufETH’s unique liquid restaking properties, combined with its substantial adoption and integration across DeFi platforms, make it a valuable addition to Compound, potentially enhancing borrowing activity and liquidity in the protocol and future appchains.
Governance Incentives for Compound Voters:
Voters who support the listing of pufETH on Compound will be rewarded with Puffer Points, which will be redeemable for Puffer’s PUFI governance token. This reward incentivizes voter participation and engagement with Puffer Finance’s governance, while also offering long-term benefits for those contributing to the ecosystem’s growth.
Motivation
pufETH is the liquid restaking token within the Puffer Finance ecosystem, which is built on the EigenLayer. It allows holders to participate in Ethereum Proof-of-Stake (PoS) while earning additional rewards from restaking. Since its launch, pufETH has seen rapid adoption and integration across multiple DeFi platforms.
https://quest.puffer.fi/defi
Key highlights include:
-
Significant Total Value Locked (TVL): Puffer Finance currently holds a $1.39 billion TVL in ETH and an additional $641 million TVL across various DeFi integrations, including Pendle, Curve, Zircuit, Pencil, and Karak.
-
Major DeFi Integrations: pufETH has a $120 million TVL in its pufETH-wstETH pool on Curve, showcasing its growing liquidity and demand.
-
Robust Security and Trust: Puffer has undergone multiple audits by 10 different firms, ensuring the security and reliability of its protocol. This extensive auditing process underscores Puffer’s commitment to safety and user protection.
-
Permissionless Innovation: Puffer pioneered anti-slashers for PoS as a technology to allow for permissionless validator participation. This decentralization-first mindset and novel technology reduces tail risk from slashing.
-
Backed by Leading Investors: Puffer Finance is supported by some of the most prominent names in the industry, including Binance Labs, Brevan Howard, Avon Venture (Fidelity), Franklin Templeton, Coinbase Ventures, and Kraken Ventures, among others. This backing not only adds credibility but also highlights the potential growth and impact of the Puffer ecosystem.
Risks:
While the proposal presents compelling reasons to list pufETH, some risks need consideration:
Protocol Maturity: Although Puffer Finance has shown rapid growth, it is still relatively new, and its long-term stability is yet to be fully tested.
Conclusion:
Listing pufETH on Compound will offer users the ability to borrow against an asset that provides staking and restaking rewards, potentially increasing Compound’s appeal and liquidity. Given Puffer Finance’s substantial TVL, extensive DeFi integrations, security audits, and backing by top-tier investors, this proposal presents a strategic opportunity for Compound to align with a leading-edge DeFi project and expand its asset offerings.
