From nLRT to UniFi, it is not a simple linear expansion, but aims to expand and build a set of Ethereum decentralized infrastructure.
Written by: Puffer Finance
In August, Puffer officially announced that it had been upgraded from the native liquidity re-pledge protocol (nLRP) to an Ethereum decentralized infrastructure provider. Its product architecture includes three pillars: Based Rollup solution Puffer UniFi, pre-confirmation (Preconf) technology solution UniFi AVS, and re-pledge product Puffer LRT.
This article will start with the product of Puffer's native liquidity re-staking protocol (nLRP), revealing the internal logic of Puffer's expansion towards Based Rollup, as well as its unique mechanisms in integrating resources, meeting market demand and technological innovation, and demonstrating the integrity and coherence of Puffer's development path from Restaking to Based Rollup.
Puffer LRT: Decentralized architecture rooted in the Ethereum roadmap
Therefore, before introducing Puffer UniFi, we need to first disassemble the architecture and features of Puffer nLRT, a native liquidity restaking product. Native restaking here means that Puffer supports direct restaking of native ETH and provides it to node operators for PoS verification and AVS verification. This method is more native and has lower risks.
Puffer nLRT service includes three main groups: node operators (NoOps), re-staking operators (ReOps) and ordinary ETH staking users (Stakers):
Stakers can deposit their own ETH, stETH or wstETH and other assets into Puffer for staking, and obtain the native liquidity re-staking token pufETH, so as to accumulate staking/re-staking rewards while participating in other DeFi protocols with the liquidity of pufETH to further increase their income;
NoOps is the core role of the Puffer ecosystem, responsible for running Ethereum PoS validation nodes and participating in Ethereum's consensus process (such as proposing blocks and verifying transactions). Interestingly, Puffer uses the innovative mechanism of "Validator Tickets" to ensure that NOOps can get 100% of the PoS rewards as long as they work hard;
ReOps is responsible for PoS verification and AVSs operation at the same time. It maximizes the returns of staked assets by re-staking them. ReOps is also NoOps for PoS verification.
It is worth noting that we are currently in a transitional phase where NoOps focuses on PoS verification (but Restaking rewards are still available), mainly based on considerations of user asset security - AVS is currently in its early stages, with high uncertainty and risks, so professional node operators are temporarily left to undertake this part of the work.
In the future, as technology and mechanisms continue to improve, NoOps will not only be limited to the current scope of work, but will have more options and can undertake AVS verification responsibilities together with ReOps.
In this process, Puffer uses a variety of innovative mechanisms to lower the participation threshold for all parties involved, in order to encourage more users and node operators to actively participate and promote the further decentralization of the Ethereum staking ecosystem.
For example, Puffer uses the pioneering "Validator Tickets" (VT) model to ensure that Stakers and NoOps reach an economic incentive constraint without permission - Stakers can pre-withdraw PoS rewards for a period of time in the future (with a certain discount), and NoOps can get 100% of the PoS rewards as long as they work hard during the corresponding time period.
This allows Stakers and NoOps to collaborate based on incentive strategies to improve node funding efficiency when it is more beneficial to each of them:
For Stakers, there is no need to worry about operating nodes "just for a day". By prepaying PoS rewards to transfer risks, the risk of losing staking income due to NoOps "laziness" or even rug pulls can be avoided;
For those who want to become NoOps, as long as they buy VT (currently at least 28 VT) and deposit a minimum of 1 ETH (if anti-slashing technology is not used, the margin needs to be 2 ETH) as collateral, they can join the Puffer node module without permission, which is more capital efficient than traditional liquidity staking protocols;
This also means that the entry threshold of NoOps is greatly reduced, allowing more non-institutional small and medium-sized operators to participate in node operations. Not only can more ordinary people use less funds to run verification nodes, but also the same amount of funds can be used to run more verification nodes, thereby improving the efficiency of fund use and strengthening the decentralization of Ethereum.
UniFi’s narrative expansion of “killing two birds with one stone”
This is also the natural advantage of Puffer LRT products over other liquidity pledge/re-pledge products. At this point, we can find that this happens to meet the needs of Based Rollup that Vitalik Buterin has repeatedly mentioned:
In the Based Rollup architecture, the core idea is to transfer the responsibility of transaction sorting to L1 - using the decentralized set of verification nodes of the Ethereum mainnet to be responsible for proposing blocks and packaging transactions, thereby inheriting the security of L1 and promoting the decentralization of Ethereum.
To put it bluntly, Based Rollup requires a massive set of validator nodes (decentralized sorter set) to promote the decentralization of Ethereum, and the Puffer LRT product can provide Based Rollup with the required massive set of validator nodes by lowering the participation threshold and providing strong decentralized support.
Specifically, on the technical level, Puffer UniFi provides decentralized sorting and pre-confirmation services (UniFi AVS) by integrating the verification set directly at the Ethereum node level, thereby providing fast (millisecond level) confirmation time while eliminating the impact of single point failure or censorship risks of existing centralized sorters, which is in line with the direction required for Ethereum to further decentralize.
From this perspective, we can understand that the launch of Puffer UniFi is not a sudden attempt to test the waters in a new direction, but a natural narrative expansion based on the mature architecture of Puffer LRT products:
With Puffer's re-staking verification node set, the re-staking ETH can be directly used as pre-confirmation collateral without the need for additional deposits, which can quickly expand to tens of thousands of decentralized sequencers at almost "zero cost". The re-staking verification node = pre-confirmation service node not only improves capital efficiency, but also can quickly pull up a pre-confirmation verification node set with a large number of participants and sufficient decentralization to build the underlying architecture of Based Rollup.
Interestingly, in terms of market demand, the launch of Puffer UniFi can actually provide a more diversified source of income for Solo Stakers, helping verification nodes to obtain additional income and achieve "killing two birds with one stone":
Since the Ethereum PoS verification node is directly expanded to include the L1 sorting business, the node operator can obtain not only the Ethereum PoS verification (Puffer LRT) rewards, but also the pre-confirmation verification (UniFi AVS) and Rollup transaction sorting fees. In addition, the congestion fees (Congestion Fees) and contention fees (Contention Fees) generated by the transaction are used to increase the income of PufETH holders.
This will also further attract more operators to participate through economic incentives, thereby promoting Ethereum to achieve a higher degree of decentralization.
Puffer UniFi's application chain universe vision
From this perspective, the emergence of Puffer UniFi is actually an attempt to introduce ETH mainnet verification nodes as a decentralized sorting set, and combine its own UniFi AVS's fast confirmation advantage to provide Rollups with a safer and more efficient decentralized solution based on the idea of Based Rollup.
In this way, Puffer UniFi can effectively activate the verification node set, allowing the verification nodes to obtain additional benefits while providing pre-confirmation services and transaction sorting services, and gather multiple economic benefits of the Ethereum ecosystem to flow to L1 to enhance Ethereum's economic incentive mechanism, which is also highly consistent with Ethereum's long-term development direction.
There is even greater room for imagination because Puffer UniFi allows developers to use the infrastructure it provides to build and deploy their own Based Rollup applications, which means that every DApp on UniFi in the future can be regarded as an application chain and directly capture part of the value generated by transaction fees.
This is expected to give birth to a vision of an application chain universe based on Based Roluup:
On the one hand, since there is no need for a centralized sequencer, developers can greatly reduce operational burdens and technical expenses, lower the entry threshold for new developers, and simplify the complexity of subsequent application chain management;
On the other hand, transactions between multiple application chains can be placed in one block. As long as they are based on the same set of decentralized sorters (Ethereum verification node set), users and liquidity can be shared. Users can enjoy synchronous composability seamlessly regardless of which application chain they use, thus achieving a close connection between Rollup and Ethereum L1. For example, withdrawals from Based Rollup to L1 can be received in seconds, which helps the seamless integration between Rollup and L1, greatly improving the user experience and the efficiency of the entire ecosystem.
In addition, it allows developers/projects to capture the fees generated by the application chain, directly linking the success of the ecosystem with the personal success of developers;
To put it simply, UniFi enables projects that develop application chains to obtain the right to distribute the profits of the sorter, which is equivalent to having an additional economic baton. Whether it is used for economic activities such as subsidies, traffic diversion, marketing, etc. within its own application chain ecosystem, or for its own retention, it can derive a new Rollup/application chain incentive mechanism.
In general, Puffer UniFi essentially combines the advantages of its own staking/re-staking verification node set to enter the new direction of Based Rollup, thereby activating an imagination space as the infrastructure of the future pan-Based Rollup application chain universe through the application chain architecture based on Based Rollup + the economic mechanism based on its own sorter set.
summary
If we sort out the role of Puffer LRT as the "origin" in the entire service matrix, we will find that the transition from LRT service to the launch of Puffer UniFi and even UniFi AVS is not a simple linear expansion of product layout, but an inevitable choice based on the resources and technical advantages accumulated by re-staking:
By utilizing LRT's staking/re-staking verification node set, Puffer UniFi's demand for a decentralized sorter set as a Based Rollup can be further met, while UniFi AVS, as a pre-confirmation technology solution, can provide reliable protection for transactions. This also reflects our judgment and persistence on the future development trend of the Ethereum ecosystem.
In short, Puffer nLRT, Puffer UniFi, and UniFi AVS are a series of products that work together to build a complete Ethereum decentralized infrastructure service system through the logical narrative advantage expansion. Among them, Puffer's Validator mechanism is undoubtedly the core infrastructure of the entire system - the permissionless feature brings great openness and scalability to the Ethereum ecosystem, which means that any Ethereum node has the opportunity to participate.
As time goes by, if more and more new Ethereum nodes appear and join this node set, it will not only greatly enrich the node resources and improve the decentralization of the network, but also because Rollups and L1 are based on a common node set, it also means that the synergy between Based Rollup and L1 built on these nodes will continue to increase, and the connection between technical implementation and ecological operation will become closer and closer, gradually merging into one to create a benign Ethereum ecosystem with positive feedback.
