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Ethereum restaking protocol Puffer Finance has partnered with Anchorage Digital to provide institutional clients with access to pufETH, Puffer's liquid restaking token, via Anchorage's regulated custody platform.
The integration allows institutions to gain exposure to Ethereum staking and restaking yields while operating within compliant custody and security frameworks. For institutional players that have historically been cautious about engaging directly with DeFi protocols, the partnership offers a more familiar on-ramp into Ethereum-native yield products.
Puffer differentiates its restaking model by distributing validation across a decentralized set of operators rather than relying on a handful of large validator providers, which the protocol says reduces concentration risk. The protocol also touts slashing penalty protection and a buffer designed to absorb losses before they reach pufETH holders, a feature aimed at satisfying institutional risk models that demand clearly defined downside scenarios.
The collaboration comes at a difficult time for liquid restaking protocols. Apart from etherfi and Kelp, most liquid restaking protocols have struggled to retain users. As points-based incentive programs ended, capital rotated out and consolidated into the most established venues.
Puffer launched in February 2024, attracting nearly $200 million in total value locked (TVL) on its first day as the liquid restaking sector boomed on EigenLayer hype. By October 2024, Puffer’s TVL had grown to over 500,000 ETH, worth more than $1.3 billion at the time.
Today, Puffer's core protocol TVL sits at just $62 million, according to DeFiLlama. The drawdown mirrors a broader trend across the liquid restaking sector following the initial airdrop-fueled frenzy.
The PUFFER token tells a similar story. The token hit an all-time high near $1.00 in December 2024 but has since cratered, hitting an all-time low of $0.025 just last week, according to Coingecko.
The Anchorage deal signals that Puffer is increasingly focused on the institutional market as a path to sustainable growth, a pivot away from the retail-driven points campaigns that initially powered its TVL.
crypto-economy.com
