The co-founder and CTO of Puffer, Jason Vranek, presented a thought-provoking session at Devconnect Istanbul 2023. His insights at ethStaker’s Staking Gathering painted a vivid picture of Puffer’s unique positioning in the liquid restaking ecosystem.
His presentation offered a thorough and detailed look into Puffer’s protocol, its unique approach, and its impact on the Ethereum staking landscape. This talk is one of the most complete and insightful overviews of Puffer’s technology to date.
For those eager to experience the full depth of his presentation, the complete talk is available for viewing at the link below:
For an improved understanding, the transcript below has been carefully edited for clarity. Let’s dive into it!

Exploring Puffer’s Tech with Jason Vranek
“Thank you for having me here. Today, I’ll discuss Puffer and our journey to where we are now. Puffer is a liquid restaking protocol, and I’ll provide some background to differentiate our work from existing concepts.
Liquid staking tokens are familiar to many. In this system, stakers deposit ETH, mint a liquid staking token, and nodes borrow this ETH to run validators for proof of stake rewards. A portion of these rewards goes back to the liquid staking token holders, allowing stakers to redeem ETH plus rewards, minus any penalties incurred by validators.
The industry sees the advantages, such as the yield of liquid staking tokens (LSTs), ease of use, liquidity, and capital efficiency for node operators, who don’t need 32 ETH to run a validator. However, there are cons, like proof of stake congestion and centralization, which can reduce economic security, especially when liquid staking protocols do not require their node operators to put down collateral. At Puffer we believe it is incredibly important for Ethereum’s long term health to try and address these challenges.
Our journey began with Secure-Signer, an anti-slashing mechanism using Intel SGX as a Trusted Execution Environment (TEE). We’re expanding this to other hardware manufacturers. The validator has no access to their private key, which is stored in the secure enclave, preventing accidental double-signing and slashing. We built this as part of an Ethereum Foundation grant and made it open source, available for solo stakers as well.
Building Puffer, we aimed to reduce slashing risk for a permissionless liquid staking protocol, thus reducing the bond requirement, which increases decentralization. Our guiding principles are being permissionless, ensuring safety for stakers and node operators, being capital efficient and accessible for node operators, ensuring scalability, and aligning with the ethos of the community.
At a high level, Puffer is Ethereum liquid staking where you earn proof of stake rewards with validators, but we’re also doing native restaking on Eigenlayer to generate additional rewards. Native restaking differs from regular restaking, where you take your liquid staking token and restake that to run Eigenlayer applications. In native restaking, you’re reusing your Ethereum validator’s Beacon chain ETH to secure different Eigenlayer applications or “AVSs”.
We introduced Smoothing Commitments, a simple yet interesting mechanism. Validators can pay upfront, close to the expected value of their validator rewards, and keep all generated rewards. This results in stakers on Puffer earning months of rewards upfront, which is beneficial for the protocol’s growth. This also helps to align node operators’ incentives to provide better security for the protocol’s staked ETH and it solves the issue of MEV-theft which is present in all liquid staking protocols.
Node operators on Puffer that prove they are running Secure Signer are admitted with a lower bond requirement (1 ETH). If you don’t use the anti-slasher, the bond is slightly higher (2 ETH). The protocol uses strategies, or restaking modules, where a node deploys their validator into the Puffer protocol. The main module is non-restaking, distributing ETH within the protocol and prioritizing the least risky option.
After depositing, the node borrows ETH to run their validator and decides on a strategy. Each strategy is run by a strategy operator who runs the applications but shares rewards with validators and LST holders. This allows node operators to deploy validators with less capital and earn additional restaking rewards.
PufETH, our native liquid restaking token, combines restaking rewards, smoothing commitments, and staked ETH. Stakers deposit ETH, nodes pay smoothing commitments and deposit bonds, giving months worth of proof of stake rewards upfront to stakers. The borrowed ETH is natively restaked and run by a strategy operator, generating rewards that flow back through the protocol.
We have growth spurts, where the yield on the native liquid restaking token increases when a node joins Puffer. We’re trying to compete with centralized liquid staking protocols, but we’re also mindful of our growth and ethos alignment. Our burst threshold caps the protocol at 22%, balancing growth and maintaining Ethereum’s credible neutrality.
In conclusion, Puffer focuses on safety, scalability, profitability for Node Operators, and ethos alignment. We’re launching on the public testnet soon, inviting everyone to join and run Puffer nodes!”

Puffer is the first native Liquid Restaking Protocol (nLRP) built on EigenLayer. It introduces native Liquid Restaking Tokens (nLRTs) that accrue PoS and restaking rewards. Nodes within the protocol leverage Puffer’s anti-slashing technology to enjoy reduced risk and increased capital efficiency, while supercharging their rewards through native restaking exposure. Learn more: www.puffer.fi

The Unparalleled Synergy

HashQuark has joined forces with us since the Puffer testnet phase, bringing a wealth of expertise to the collaboration. Their deep insights and extensive experience are crucial in advancing our technology and staking services.
Their firsthand engagement with Puffer’s innovative technology will be particularly valuable. It will help us refine and optimize our services as we move toward the Public testnet.
Both Puffer and HashQuark share a profound dedication to fostering a permissionless product and preserving the decentralization of Ethereum.

About HashQuark

HashQuark is a world-leading blockchain staking service provider. As a core member of HashKey Group, we support most mainstream public chains with native staking services and liquid staking services. HashQuark is committed to providing safe and reliable services for global blockchain users and developers to promote the development and application of blockchain technology.
Know more: hashquark.io

Next Steps

With the support of HashQuark, we are on the brink of introducing innovative, secure, and efficient solutions to the Ethereum Validation.
This alliance marks a new and exciting chapter in the realms of Ethereum staking services.
Stay tuned for more updates on our transformative journey!

The Synergy

InfStones is lending their expertise to assist us in the Puffer testnet phase. Their insights and experience will be instrumental in refining our technology and ensuring its robustness.
Their hands-on experience with Puffer’s innovative technology will be invaluable in refining and perfecting our services leading up to our Public testnet.
Both Puffer and InfStones are deeply committed to fostering a permissionless product and championing Ethereum’s decentralization.

About InfStones

InfStones has emerged as a leader in blockchain infrastructure, guided by industry pioneers and backed by an impressive $110 million in funding from seasoned investors, including SoftBank, GGV Capital, 10T Holdings, SNZ, SIG Susquehanna, Dragonfly Capital, Qimin Venture Partners, Hashkey Capital, and Plug and Play. Their services include staking and liquid staking, domains in which they have developed considerable expertise.
Notably, InfStones is at the forefront of protocol coverage, managing over 80 protocols. Their expertise is further underscored by their stewardship of over 20,000 ETH validators and the management of more than $1 billion in ETH assets. This extensive pool of managed assets, coupled with their longstanding presence in the industry, places InfStones at the forefront of Ethereum staking innovation.

Final Remarks

With the support of InfStones, we are poised to introduce innovative, secure, and efficient solutions to the Puffer community.
This alliance signifies a fresh chapter in the domains of staking and decentralized finance.