Summary
BENQI provides users with an Avalanche-based network that is scalable, accessible, and decentralized. The BENQI ecosystem has established two major protocols, namely BENQI Liquidity Staking and BENQI Liquidity Market.
BENQI Liquidity Staking (BLS) is a liquidity staking solution that enables staking AVAX is tokenized to allow users to use yield-generating assets in DeFi applications.
Users can easily borrow, borrow and earn crypto assets through the BENQI Liquidity Market (BLM) Interest. Depositors who provide liquidity to the protocol earn returns, while borrowers are able to borrow on an over-collateralized basis.
In the past few years , decentralized finance (DeFi) is booming. This important cryptocurrency segment provides users with a transparent, accessible and permissionless platform to access financial instruments. Whether you use BNB Chain, Ethereum, Avalanche or other networks, you can access a vast array of financial services in just a few clicks.
BENQI attaches great importance to the characteristics of people-friendliness, ease of use and low fees, and aims to promote two basic financial products:Liquidity Staking, an innovative financial product for unlocking the value of staked tokens, andLending.
BENQI is a decentralized finance (DeFi) protocol built on the Avalanche network. The BENQI protocol consists of BENQI liquidity staking and the BENQI liquidity market.
BENQI Liquidity Staking (BLS) is Avalanche’s liquidity staking solution, users can stake using Avalanche validators of locked funds. This feature provides additional utility for income-generating assets without lock-up periods or cumbersome cross-chain transfers.
BENQI Liquidity Market (BLM) is BENQI’s lending protocol. Users can borrow and lend listed crypto assets in a permissionless manner through smart contracts without the involvement of human intermediaries. Users earn income by depositing assets into the market, and borrowing is done on an over-collateralized basis.
Users stake AVAX in BLS and receive the income-generating asset sAVAX, which can earn income from Avalanche validator rewards. sAVAX can be freely transferred, traded or used in DeFi applications, such as automated market makers (AMMs), lending protocols and revenue aggregators.
Through BLS, users can stake AVAX in the Avalanche C chain that is compatible with virtual machines, instead of in the Avalanche P chain Pledge. This mechanism allows users to receive verification rewards from the P chain without having to run a full node, lock AVAX on a validator node, or meet a minimum staking threshold.
Users can redeem AVAX assets for free at any time during the 2-week non-staking cooling period, or immediately through automated market makers Trade assets and pay transaction fees.
BLM is a lending protocol deployed by BENQI in the Avalanche network. Through this protocol, users can easily borrow, borrow and earn income with cryptocurrency assets. Unlike the traditional lending market, BLM operates entirely through smart contracts without artificial intermediaries.
Through smart contracts, the rate of return is algorithmically calculated based on the lender's supply and the borrower's demand for BLM. Depositors who provide liquidity to the protocol are algorithmically rewarded, while borrowers are able to borrow on an over-collateralized basis.
The third party earns incentive fees by forcing the liquidation of the borrower's assets. Forced liquidation is based on parameters set in the smart contract, as well as price feedback provided to the asset. BLM obtains price feedback from Chainlink, a decentralized oracle network that provides secure and reliable price data.
BENQI puts people-friendliness, ease of use and low cost first. By deploying on the Avalanche network, users enjoy the benefits of a highly scalable platform that is both decentralized and affordable. The BENQI founding team works extensively with Avalanche and the DeFi community to continually review and enhance BENQI’s exclusive portfolio of protocols, which includes:
1.Seamless staking experience— BLS provides users with a seamless solution for staking AVAX. By staking BLS, users can avoid the cumbersome process of running an Avalanche validator, or avoid having to meet the minimum requirements to stake on the Avalanche P chain.
2.High level of liquidity and integration—Users who stake AVAX on BLS will receive income-generating tokens Coin sAVAX, the token is deeply integrated within Avalanche’s major DeFi applications.
3.Utility—veQI token provides QI token utility. By staking QI for veQI, Avalanche validators can directly stake BLS’s AVAX delegation to the validator of their choice to receive more delegation rewards.
Universal Access — Assets listed on BLM include most blue chip assets such as wBTC, WETH, AVAX, sAVAX, as well as various widely adopted stablecoins , such as BUSD. Through BLM, users can easily earn asset returns while borrowing in an over-collateralized manner.
Deep Liquidity and Connectivity—BLM provides users with deep liquidity lending. Users can easily borrow assets and transfer them to top centralized exchanges, or bridge borrowed assets to major Layer 1 networks, including BNB Chain, Ethereum, Polygon, Arbitrum, and more.
QI is BENQI’s native token and has two main functions: governance and utility. QI is BENQI’s governance token and is responsible for overseeing upgrades and changes to the BENQI protocol. QI must make decisions and vote on proposals proposed by BENQI DAO to control the direction of the agreement. Key parameters for proposals and voting include: economic proposals, security upgrades, and other developments on the BENQI protocol.
In BENQI Liquidity Staking (BLS), users can stake QI to obtain veQI, a novel utility token that can provide High-performance Avalanche validator provides more AVAX staking delegation. Voting Escrow QI (veQI), represents the user’s voting rights for other AVAX delegations of BLS.
Through veQI, users can vote for certain Avalanche validators to receive more from BLS’s AVAX liquidity pool AVAX pledge delegation. The number of delegates is based on the total number of votes cast by validators on veQI. A total of 30% of BLS’s delegation is open to veQI holders. To qualify, a verifier must first meet the minimum criteria for verifiers.
BENQI for DeFi Existing users, or users who want to try DeFi, are provided with a vast number of options without having to worry about the additional friction of the past. Focusing on protocols that are usable and deeply integrated with other DeFi platforms, all users need is a web3 wallet, an internet connection, and some funds.