Overview
Stake AVAX without locking it up. Earn and freely use it within DeFi.
BENQI Liquid Staking is the leading liquid staking protocol built on Avalanche, surpassing $250M in Total Value Locked (TVL) by solving a critical issue: illiquidity.
Avalanche, as a Proof-of-Stake (PoS) network, enables users to earn rewards by staking AVAX tokens to secure the network. However, staking on the Avalanche Platform Chain (P-Chain) locks AVAX tokens, making them inaccessible and illiquid.
By issuing sAVAX, BENQI unlocks liquidity for staked AVAX, allowing users to engage in DeFi activities while earning passive staking rewards.
BENQI also provides staking infrastructure solutions that make it easy for anyone to start running their own validators. We cover this in the Ignitesection.
What is BENQI Liquid Staking?
BENQI's liquid staking infrastructure tokenizing staked AVAX and allows users to freely use it within DeFi applications such as AMMs, lending & borrowing protocols, yield aggregators, etc. For example, one could stake their AVAX, receive sAVAX, and lend that out via BENQI Markets for yield.
Furthermore, rather than bridge funds from the C-Chain to the P-Chain (where staking occurs), BENQI BENQI allows users to stake AVAX directly on the C-Chain and then securely and automatically bridges assets over using MPC encryption.
Key benefits of staking AVAX via BENQI include:
DeFi Integrations: sAVAX is integrated into various DeFi protocols, meaning users can earn both staking rewards and DeFi yields simultaneously. For instance, sAVAX could be lent through BENQI or a separate lending protocol for additional yield, supplied to any liquidity pool containing sAVAX (e.g. sAVAX/AVAX), and much more.
Cross-Chain Staking: As Avalanche staking on occurs on the Avalanche P-Chain, users must normally bridge tokens from the C-Chain to the P-Chain. BENQI simplifies the staking process by allowing users to stake AVAX directly on the C-Chain, using secure MPC encryption to bridge assets to the P-Chain automatically. Without this integration, users would have to bridge their AVAX manually.
No Lock-Up Periods & Zero Fees: Enjoy the flexibility to unstake your AVAX anytime without long-term commitments. There are also no fees for staking, depositing, or withdrawing your AVAX.
What is sAVAX?
sAVAX is the token users receive when staking their AVAX on BENQI Liquid Staking. It represents their staked position and accrues interest from Avalanche staking rewards.
Users can exchange sAVAX for AVAX + staking rewards via the Unstake tab in the BLS app. The price of sAVAX increases over time based on the amount of staked AVAX in the pool and accrued rewards.
sAVAX Price = total AVAX staked / total sAVAX minted * AVAX price
For example, if there are 10,000 AVAX staked and 9,000 sAVAX minted, with the current AVAX price at $100, the sAVAX price would be approximately $111.11.
A few other pieces of information worth noting:
Transferability: Unlike directly running or delegating AVAX to a node, sAVAX is transferable and can be used across DeFi applications like AMMs, lending platforms, and derivatives.
Unstaking: AVAX can be unstaked anytime with a 15-day unlock period, during which sAVAX continues to accrue rewards. Rewards stop accruing only during the final 2-day redemption period after the unstake request is processed. For immediate liquidity, secondary markets offer instant swaps between sAVAX and AVAX based on the market rate.
Rewards Accrual: sAVAX automatically accrues rewards based on the staking rate. For example, a 7.2% APR in staking rewards means your sAVAX will be worth 7.2% more in AVAX after one year.
Protocol Revenue: While no fees are charged, the protocol earns 10% of the rewards generated by validators, including a portion of the delegator fees.
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