Architecture

On this page, we'll provide an architectural overview of BENQI Liquid Staking based on the below graphic. We will explain how users can stake AVAX, receive sAVAX, and utilize it within DeFi while earning rewards.

1. Staking AVAX with BENQI

Beginning at the top of the graphic, users stake AVAX on the C-Chain and receive sAVAX tokens on the C-Chain, representing their staked AVAX.

This AVAX is then delegated to validator nodes on the Avalanche P-Chain, where it contributes to network security and earns staking rewards. Funds are secured via MPC encryption on the P-Chain and bridged to the C-Chain.

2. Earning and Redeeming Rewards

Staked AVAX continues to earn rewards on the P-Chain, and the value of sAVAX accrues as these rewards accumulate.

To redeem AVAX, users can either:

• Claim AVAX directly through BENQI Liquid Staking with a 15-day cooldown period, or

• Instantly swap sAVAX for AVAX on an Automated Market Maker (AMM) platform if they prefer immediate liquidity, though AMM fees may apply.

3. sAVAX DeFi Integrations

The sAVAX token provides additional utility by allowing users to participate in decentralized finance (DeFi) protocols.

Users can use sAVAX in BENQI Markets or other DeFi platforms to earn extra yield, borrow against it, or engage in various DeFi activities.

This setup allows users to maintain exposure to AVAX staking rewards while also unlocking liquidity through DeFi, enhancing both yield opportunities and flexibility in asset management.