Liquid Restaking Protocol Puffer Finance Unveils CARROT Airdrop Tokens

Liquid restaking protocol Puffer Finance has unveiled CARROT, a rewards token users can earn by staking, providing liquidity and voting on governance proposals.

100 million CARROT tokens will be distributed through a community voting process in which users determine where and how the rewards are distributed, Puffer Finance said in a Jan. 22 X post. Once the Season Two rewards period ends with a Jan. 31 snapshot, CARROT tokens will be converted into PUFFER tokens for the airdrop.

The launch of CARROT tokens provides an on-chain rewards system more transparent than its old off-chain Puffer Points rewards, Puffer Finance said in a blog post.

Puffer Finance currently has $268 million in total value locked (TVL), down substantially from its June high of $1.84 billion, according to DeFiLlama. TVL was at $1.31 billion when the second season of Puffer rewards started on Oct. 5.

Liquid staking explodes

The liquid restaking sector has continued to boom, rising from $296 million at the beginning of last year to $14.1 billion today, according to DeFiLlama.

Liquid restaking allows users to earn additional yield on their staked ether while keeping assets liquid by taking the liquid staking tokens received and staking them again, essentially earning rewards twice from the same token. It’s a way of maximizing decentralized finance (DeFi) earnings without locking up assets.

The liquid restaking sector boomed last year on the hype around EigenLayer and the success of Etherfi, which currently has $8 billion restaked. Other top players in the field include Kelp rsETH, with $1.85 billion TVL, and Renzo, with $1.1 billion. Puffer FInance is currently the seventh largest liquid restaking protocol.