Delegation Strategy

All Avalanche validators can join the BENQI Liquid Staking delegation set as long as they meet the validator minimum criteria. It is fully permissionless and there are no whitelists.

The delegation strategy aims to distribute staked AVAX to high performance Avalanche validators. Aligning with the ethos of decentralization and being open, delegations from BENQI Liquid Staking are eligible to all Avalanche validators with or without veQI.

Delegation Pools

There are two delegation pools within the BENQI Liquid Staking delegation structure - Open Pool and the veQI Pool.

Open Pool delegations applies to all Avalanche validators that meet the validator minimum criteria.

veQI Pool delegations are only for veQI holders that meet the validator minimum criteria for the veQI Pool.

Validator Minimum Criteria

The current minimum criteria for validators are:

• 15 day remaining uptime

• Validator Stake Open Pool: 6000+ AVAX Validator Stake veQI Pool: 2000+ AVAX

• Delegation fee Open Pool: 2% Delegation fee veQI Pool: 2% to 5%

Delegation Structure

The structure of the two delegation pools

Open Pool (65%)

The Open Pool receives a total of 65% of all delegations. It is allocated to all validators that meet the validator minimum criteria (including veQI and non-veQI holders).

Avalanche validators that meet the validator minimum criteria with a delegation fee of 2% qualify for delegations from this pool.

The delegations from this pool are randomly allocated to validators.

veQI Pool (35%)

The veQI Pool is allocated to only veQI holders. 35% of total delegations have been allocated to this pool.

Avalanche validators that meet the validator minimum criteria with a delegation fee of 2% to 5% qualify for delegations from this pool.

veQI holders vote to allocate delegations from BENQI Liquid Staking to their Avalanche validator of choice by voting for it.

Note: Amount of delegations to validators is based on the validator’s aggregate vote count of veQI.

Possible outcomes for Avalanche validator delegations based on delegation fee set

a) Minimum criteria met with 2% delegation fee and no veQI vote power

These validators qualify for delegations from the Open Pool and delegations are allocated randomly by BENQI Liquid Staking.

b) Minimum criteria met with 2% delegation fee + veQI vote power

These validators qualify for delegations from the Open Pool and veQI Pool.

veQI Pool delegations are allocated according to a validator's aggregate vote power.

Open Pool delegations are allocated randomly from BENQI Liquid Staking.

c) Minimum criteria met with >2% to 5% delegation fee + veQI vote power

These validators qualify for delegations from the veQI Pool only.

veQI Pool delegations are allocated according to a validator's aggregate vote power.

d) Minimum criteria met with > 5% delegation fee

These validators are not eligible to receive any delegations from BENQI Liquid Staking