Introduction to BENQI
Last updated
Last updated
BENQI is a suite of leading DeFi protocols built on . In a short period of time, BENQI has become the #1 application on Avalanche (by TVL) thanks to BENQI's core products, each with deep liquidity and extensive integrations across the DeFi landscape.
BENQI's 4 core products include:
: For staking AVAX in exchange for sAVAX, deployable throughout DeFi while still earning staking rewards.
: For lending borrowing, and earning interest on digital assets within both core and isolated markets.
: For fast and easy deployment of Avalanche validators, catering to institutions, developers, and Web3 users.
For receiving AVAX delegations and rewards, if you run an AVAX validator by voting with
BENQI tokenizes staked AVAX through liquid staking and issues sAVAX, a liquid staking token that is widely integrated throughout the Avalanche DeFi ecosystem.
Users can stake directly from the Avalanche C-Chain, eliminating the need to bridge assets to the P-Chain. Additionally, users can hold, swap, or collateralize their sAVAX to earn additional yield while maintaining liquidity.
Users can lend, borrow, and earn interest with their digital assets.
Depositors providing liquidity to the protocol earn yield, while borrowers can access funds through over-collateralized loans. All positions can be easily monitored through our newly designed user interface.
There are two primary markets:
Core Markets: BENQI's primary lending and borrowing pools designed for highly liquid assets such as AVAX and USDC.
Avalanche Ecosystem Markets: : Designed to support a broader range of assets, including long-tail crypto assets and tokenized real-world assets (RWAs). These markets feature specialized risk management to ensure that volatility or liquidity issues in one market don’t impact the others, providing more flexibility for DeFi users.
It can be technologically challenging to launch an Avalanche validator, and require significant upfront capital.
Ignite is BENQI’s solution that makes it fast and easy to launch and run Avalanche validators and Subnets with minimal little-to-no upfront capital and no technical complexities.
Ignite offers two key options, allowing users to choose the one that best suits their needs:
Pay-As-You-Go (PAYG): Run a validator with no upfront AVAX by paying a weekly fee. Ideal for short-term use cases like MEV Solvers.
Stake: Stake QI and cover hosting fees to run automated validators and earn QI rewards without the need to manage any technical details.
BENQI's liquid staking pool allocates AVAX to validators on the Avalanche network, using a 35/65 delegation split as follows:
BENQI Miles Pool (35%): Delegated based on community-driven votes, where BENQI Miles holders select specific validators through Node Voting.
Open Pool (65%): Randomly allocated to all validators who meet the minimum criteria.
Therefore, Node Voting applies only to the BENQI Miles Pool.
It's the governance feature whereby holders of BENQI Miles tokens can support specific validators on the Avalanche network. By voting with their BENQI Miles, users can influence how AVAX from BENQI’s Liquid Staking Pool is delegated to validators.
Related to this are BENQI Miles, which have two options for accrual:
Flex Option: What exists today. Miles accrue gradually over time as users stake their QI, with full benefits accumulating after a specified period.
Lock Option: A planned feature that has not yet been implemented. Miles accrue instantly upon staking, but users face a delayed exit period when they choose to unstake.
While BENQI is designed to minimize risks, no blockchain protocol is entirely risk-free. Smart Contract risks and Liquidation risks are potential considerations when interacting with the protocol. BENQI mitigates these risks by undergoing rigorous audits and maintaining a public, open-source codebase for transparency and security.
We covered these in further detail in the Risks & Audits section.