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Overview

BENQI's liquid staking pool holds a large amount of AVAX that is reserved for earning protocol revenue via liquid staking. Given BENQI's focus on gradual decentralization, a key strategy is distributing staked AVAX to trustworthy Avalanche validators.

This is done via Node Voting, which allows holders of BENQI Miles tokens, including validators themselves, to vote regarding how AVAX is delegated from BENQI’s Liquid Staking Pool. Although BENQI Miles will be used for various use cases in the future, this represents an initial use case that increases decentralization and validator rewards.

As a reminder, BENQI Miles are earned by staking QI, with an accrual rate of 0.000003888888888 Miles per staked QI each second. So over the course of one day (86,400 seconds), a user would earn approximately 336 BENQI Miles for each staked QI.

There are two ways (subject to change) to accrue Miles:

  1. Flex Option: What exists today. Miles accrue gradually over time as users stake their QI, with full benefits accumulating after a specified period.

  2. 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.

Delegations

There are two delegation pools:

  • Open Pool (65%): Available to BENQI-selected validators that meet enhanced performance and infrastructure requirements to validate the Avalanche Network. Delegations within this pool are distributed among eligible high-spec validators. In the event of capacity constraints or overflow within the selected validator set, any validators that meet the minimum network requirements may receive delegations to ensure efficient capital deployment and network participation.

  • BENQI Miles Pool (35%): Available only to validators selected by BENQI Miles holders, with delegations distributed randomly based on the validator's aggregate vote count. This incentivizes validators to hold BENQI Miles to vote for themselves and receive additional delegations, though users may also vote for nodes.

Example: BENQI Miles Pool in Action

Lett’s say Validator A receives 2,000 votes from BENQI Miles holders, while Validator B receives 1,000 votes.

In this setup, Validator A has twice the amount of support as Validator B. This means that, during each delegation cycle, Validator A will have a 66.7% chance of being selected to receive AVAX delegations from the pool, while Validator B will have a 33.3% chance.

As a result, the higher the number of votes a validator receives, the greater their likelihood of receiving additional stake from the BENQI Miles Pool, allowing the community to influence which validators gain more network influence.

We cover this further in Delegation Pools

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