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What is BENQI?Launched in 2021, BENQI offers a suite of DeFi protocols, enabling users to lend, borrow, and earn interest on their digital assets.
3 minOct 10, 2024

What is BENQI?

Exploring BENQI: DeFi & Liquid Staking on Avalanche

Launched in 2021, BENQI offers a suite of DeFi protocols, enabling users to lend, borrow, and earn interest on their digital assets. Through three core products: BENQI Markets, BENQI Liquid Staking, and Ignite, the platform seeks to enhance capital efficiency while providing a simplified liquid staking experience for Avalanche's native token, AVAX. By focusing on accessibility, security, and decentralization, BENQI aims to be a key player in the evolving DeFi space on Avalanche.

BENQI's ecosystem offers three distinct services:

1) BENQI Markets: 

This is a liquidity market that allows users to lend, borrow, and earn interest on digital assets. Users can supply assets to the protocol to earn yield, and borrow over-collateralized loans. Key features include:

  • Instant liquidity supply and withdrawal.
  • The ability to borrow against provided collateral.
  • Transparent, real-time interest rates based on market supply and demand.

    • 2) BENQI Liquid Staking: 

    A liquid staking solution for AVAX, this service enables users to stake AVAX while maintaining liquidity over their staked assets. Unlike traditional staking, users can transfer their staked AVAX, use it as collateral, or interact with other DeFi protocols, enhancing capital efficiency.

    3) Ignite: 

    This service is designed to support Avalanche validators and Avalanche L1 blockchains. Ignite lowers barriers for validator participation by offering:

  • Pay As You Go (PAYG): Allows users to rent AVAX for validation, reducing capital needs.
  • Stake: Lets users stake AVAX and QI to launch validators without fees, with rewards distributed based on the staked amount.

    • Token Utility:

    BENQI's native token, QI, plays several important roles in the ecosystem:

  • Governance: QI holders have governance rights and can propose or vote on BENQI Improvement Proposals (BIPs). The goal is for BENQI to fully transition into a Decentralized Autonomous Organization (DAO), governed by its community.
  • Incentives and Rewards: QI is used to incentivize participation across the platform, including for staking, borrowing, and liquidity provision.
  • veQI (vote-escrowed QI): Users can stake QI to receive veQI, granting them additional voting power and the ability to influence AVAX validator selection within BENQI Liquid Staking.
  • Collateralization: QI tokens can also be used as collateral, particularly within the Ignite platform, where a combination of AVAX and QI is required for validator staking.

    • The total supply of QI is capped at 7.2 billion tokens.

    About the Founders:

  • BENQI was founded by Rome Blockchain Labs Inc., a firm focused on decentralized finance software development, and 
  • Dan Mgbor - Leading Operations.  Previously Technology Consultant for a Multinational IT Service and Consulting Company. 
  • Hansen Niu - Leading Strategy.  Leading Strategy. Background in engineering, previously an Investment Lead at a Family Office.
  • Jason Tuang - Leading DeFi. Background in Finance, previously a big 4 accounting firm. 

    • Strategic Investors & Decentralization Path:

    BENQI has garnered $9 million in funding from major investors, including Ascensive Assets, Dragonfly Capital, and Ava Labs. As the platform evolves, BENQI plans to transition governance to its community through a DAO structure, with QI holders playing a central role in decision-making and protocol development. This decentralization process will involve governance over key parameters, including interest rate models, asset additions, and liquidity mining programs, ensuring the platform remains community-driven.

    Moving Forward

    In summary, BENQI aims to position itself as a key player within the Avalanche DeFi ecosystem by offering efficient liquidity solutions, expanding staking opportunities, and enabling wider participation in validator networks. Through its suite of DeFi products, BENQI looks to enhance both capital efficiency and accessibility, making it simpler for users to interact with and benefit from DeFi. By doing so, the platform is looking to drive greater adoption of DeFi services and strengthen the wider Avalanche ecosystem.


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    written byUphold Team
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