Overview

BENQI Markets enable users to earn interest on their deposits and borrow against their holdings. This means they can maintain their exposure to potential asset appreciation while accessing additional capital to enter new positions.

For example, a user may wish to enter a new position but lacks available funds and does not wish to sell their existing $QI tokens.

They could:

  1. Deposit $QI into the BENQI protocol as collateral

  2. Borrow $USDC or another asset against their lent $QI

  3. Use the borrowed asset to enter positions

Imagine they used borrowed funds to purchase $BTC.

If both $BTC and the collateralized $QI appreciate in price, they could repay their $BTC loan and still maintain ownership of their $QI holdings. This approach allows the user to profit from the appreciation of both assets while maximizing capital efficiency. Once the loan is repaid, they can reclaim their $QI collateral and retain any additional gains from the $BTC investment.

Core Markets & Avalanche Ecosystem Markets

There are two core types of lending markets:

  1. Core Markets: BENQI's primary lending and borrowing pools are designed for highly liquid assets such as AVAX and USDC, offering lower risk and stable returns.

  2. Avalanche Ecosystem Markets: Focused on long-tail crypto assets and RWAs, with carefully crafted risk parameters to ensure that volatility or liquidity issues in one market do not affect the others. Users may only borrow $USDC against these positions.

Last updated