The 🧛 Strikes Puffer!

Puffers, it’s a big day - our 🧛 has officially started!

With this first transaction batch, $13.2M in stETH deposited into Puffer has been redeemed into ETH.

Source: Etherscan

In the upcoming weeks, all stETH deposits in our protocol will be converted into ETH to fund our permissionless validators on Puffer’s Mainnet and take another step toward a decentralized Ethereum.

Why 🧛?

The impetus for this campaign stems from a critical observation: a significant portion of Ethereum’s staked ETH is concentrated under a single Liquid Staking Token (LST) — stETH (🥕).

Holding approximately 28.69% of all staked ETH, this centralization presents not only a theoretical risk but a tangible threat. Cartelization, transaction censorship, and manipulative extraction of MEV are just a few of the potential dangers. Such a scenario could undermine the integrity and security of the entire Ethereum network.

From its inception, Puffer has been an ardent advocate for the decentralization of Ethereum. The recent Crunchy Carrot Quest successfully amassed $1.36 billion in stETH deposits, which corresponds to approximately 4.48% of all stETH supply.

By converting this stETH into ETH, Puffer will effectively decrease stETH’s dominance over the staked ETH on the beacon chain by approximately 1%.

With the official launch of our Mainnet, these efforts herald the dawn of Puffer’s ambitious journey to safeguard the decentralization of the Ethereum ecosystem.

How the 🧛’s Gonna Work

The mechanics of the 🧛 have been meticulously designed to ensure seamless execution, keeping user funds secure while transforming stETH holdings into pristine ETH.

As a Puffer staker, you don’t have to do anything — all the work will be handled by our own Puffer dev team. Here’s a step-by-step breakdown of how Puffer intends to execute this bold move:

1. Initiation of Withdrawals: Puffer will begin by queuing up significant amounts of stETH withdrawals from EigenLayer, strategically breaking them down into manageable chunks (e.g., ~450K stETH divided by 45).
2. Waiting Period: After initiating the withdrawals, there will be a compulsory waiting period of approximately one week. This allows the system to process and prepare the 45 chunks for final withdrawal. During this phase, stETH deposits will stop accruing EigenLayer Points.
3. Redemption: Post the waiting period, Puffer will start redeeming these stETH chunks for ETH. The initial phase will involve withdrawing a few chunks at a time.
4. Claiming the Underlying ETH: Redeeming the chunks requires a waiting period of around three days. After this, Puffer can claim the underlying ETH, which will then be utilized to run Puffer’s permissionless validators.
5. Repetition and Earnings: The process from steps 3 to 4 will be repeated for the remaining chunks. It’s crucial to note that during the waiting period in step 2, the stETH still earns EigenLayer Points, ensuring that the staking rewards continue to accrue, albeit with a slight pause during the actual withdrawal.

This meticulous process is our commitment in action — a pledge to uphold the decentralized vision of Ethereum and to ensure a secure environment for all Ethereum enthusiasts for the decades to come.

Happy 🧛!

About Puffer

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. http://puffer.fi/