Binance Labs invests in Ethereum’s liquidity recovery protocol Puffer

Binance Labs has invested an undisclosed amount in Ethereum reprocessing protocol Puffer. Puffer Finance will use these funds to develop the Layer 2 network and bring ETH staking and reaping rewards to BNB Chain users. On Monday, January 29, Binance Labs denied claims that it participated in a $15 million funding round for SkyArk Chronicle.

Binance Labs, the venture capital and incubation arm of crypto exchange Binance, has made a strategic investment in Puffer Finance, a decentralized liquidity rebalancing protocol on EigenLayer.

Although Binance Labs did not disclose the amount invested, Puffer said in its announcement that it will use the investment to develop its open source technologies.

Today's announcement comes a day after Binance Labs released a statement disclaiming that it led a $15 million funding round for gaming platform SkyArk Chronicles.

Puffer to invest in L2 and get rewards back

One of the project areas that will see funding from the investment is Puffer's Actively Assured Services (AVSs) on the Layer 2 network. Puffer will run the upcoming L2 as AVS with EigenLayer AVS, Binance Labs said on Tuesday.

“As Puffer continues to evolve, our unique approach, supported by collaborations with renowned researchers, will increase verifier profitability, contribute to Ethereum's decentralization, and validate its infrastructure with EigenLayer,” Puffer founder Amir Foruzani said in a statement.

“We are incredibly excited to lay a strong foundation for the future of decentralized trust, ensuring a resilient and prosperous ecosystem for years to come,” added Foruzani.

Also set to receive a boost from Binance's venture arm, Puffer's Liquidity Recovery technology shows that the protocol's native Liquidity Recovery token will go live on the BNB Chain. The goal here is to bring back ETH reserves and rewards for users on the BNB Chain.

🚀 Big news! @BinanceLabs, the venture capital arm of @binance, has made a strategic investment in Puffer.

This collaboration marks a milestone in decentralized liquidity, setting the stage for a robust, accessible Ethereum ecosystem with EigenLayer tech! 🐡

— Puffer Finance 🐡 (@puffer_finance) January 30, 2024

Puffer has previously received investment funds from various venture firms during pre-seed and seed rounds. Investors in the protocol's $5.5 million seed round include Lemniscap, Lightspeed Faction, Brevan Howard Digital, Animoka Ventures, Canonical Crypto and Bankless Ventures.

The project received funding from the Ethereum Foundation for its first innovation – a remote signature tool called Secure-Signer. Validators on the Ethereum network can use this tool to reduce the risk of hacking.