Introduction to BENQI
BENQI is a suite of leading DeFi protocols built on Avalanche. In a short period of time, BENQI has become a leading application on Avalanche thanks to BENQI's core products, each with deep liquidity and extensive integrations across the DeFi landscape.
BENQI's 4 core products include:
- BENQI Liquid Staking: For staking AVAX in exchange for sAVAX, deployable throughout DeFi while still earning staking rewards.
- BENQI Markets: For lending, borrowing, and earning interest on digital assets within Core Markets (Avalanche Ecosystem Markets are decommissioned).
- Ignite: For fast and easy deployment of Avalanche validators, catering to institutions, developers, and Web3 users.
- Node Voting: For receiving AVAX delegations and rewards, if you run an AVAX validator by voting with BENQI Miles.
BENQI Liquid Staking
BENQI tokenizes staked AVAX through liquid staking and issues sAVAX, a liquid staking token that is widely integrated throughout the Avalanche DeFi ecosystem.
Users can stake directly from the Avalanche C-Chain, eliminating the need to bridge assets to the P-Chain. Additionally, users can hold, swap, or collateralize their sAVAX to earn additional yield while maintaining liquidity.
BENQI Markets
Users can lend, borrow, and earn interest with their digital assets.
Depositors providing liquidity to the protocol earn yield, while borrowers can access funds through over-collateralized loans. All positions can be easily monitored through our newly designed user interface.
There are two primary markets:
- Core Markets: BENQI's primary lending and borrowing pools designed for highly liquid assets such as AVAX and USDC.
- Avalanche Ecosystem Markets (decommissioned): Designed to support a broader range of assets, including long-tail crypto assets and tokenized real-world assets (RWAs). These markets are now decommissioned: all assets in them have been paused and collateral factors set to 0.
Ignite
It can be technologically challenging to launch an Avalanche validator, and require significant upfront capital.
Ignite is BENQI’s solution that makes it fast and easy to launch and run Avalanche validators and Subnets with minimal little-to-no upfront capital and no technical complexities.
Ignite's Pay-As-You-Go (PAYG) option lets users run a validator with no upfront AVAX by paying a weekly fee. Ideal for short-term use cases like MEV Solvers.
Node Voting
BENQI's liquid staking pool allocates AVAX to validators on the Avalanche network, using a 35/65 delegation split as follows:
- BENQI Miles Pool (35%): Delegated based on community-driven votes, where BENQI Miles holders select specific validators through Node Voting.
- Open Pool (65%): Randomly allocated to all validators who meet the minimum criteria.
Therefore, Node Voting applies only to the BENQI Miles Pool.
It's the governance feature whereby holders of BENQI Miles tokens can support specific validators on the Avalanche network. By voting with their BENQI Miles, users can influence how AVAX from BENQI’s Liquid Staking Pool is delegated to validators.
Related to this are BENQI Miles, which accrue gradually over time as users stake their QI (the Flex option), with full benefits accumulating after a specified period.
Risks
While BENQI is designed to minimize risks, no blockchain protocol is entirely risk-free. Smart Contract risks and Liquidation risks are potential considerations when interacting with the protocol. BENQI mitigates these risks by undergoing rigorous audits and maintaining a public, open-source codebase for transparency and security.
We covered these in further detail in the Risks & Audits section.