Q&A with BENQI
We’ve recently announced the exciting news that BENQI is now live in the Wirex app!
The QI token is a native asset on Avalanche and oversees the BENQI ecosystem. Want to know a bit more? We've got something special for you!
The Wirex team spoke to JD Gagnon, BENQI Co-founder to explore a little more about what QI is about!
1. What is BENQI (Qi) and what does the BENQI ecosystem consist of?
BENQI is a liquidity market protocol on Avalanche. The BENQI ecosystem consists of a lending & borrowing market, and a liquid staking platform.
2. What makes BENQI different from other liquidity markets?
BENQI's liquidity market places an emphasis on two key areas: Ease of use and security.
The protocol's user interface offers users a seamless experience in supplying and borrowing any asset supported by BENQI. Additionally, the protocol provides a visible borrowing limit dashboard along with a health factor indicator to give users ample warning on their borrowed positions that may be close to being liquidated.
As security of user funds on the platform is BENQI's priority, BENQI works closely with risk management specialists, Gauntlet Network to monitor on-chain activity of assets listed on BENQI. Any new asset looking to be listed on BENQI undergoes risk and security analysis through Gauntlet's financial modelling platform before being considered.
3. What makes BENQI different from other staking protocols?
BENQI's Liquid Staking protocol offers AVAX holders a solution to stake AVAX and earn rewards for securing the Avalanche platform while remaining liquid. The protocol provides users with a yield-bearing receipt token, Staked AVAX (sAVAX) that represents ownership of the staked AVAX.
Unlike traditional staking protocols, user funds remain liquid and the sAVAX token can be freely utilized within most major DeFi protocols including AAVE, Trader Joe, Platypus and Yeti.
]Users can also stake and unstake AVAX at any time. There is a 15-day unstaking period for users to claim native AVAX, or users can swap between sAVAX to AVAX through Decentralized Exchanges such as Trader Joe / Platypus / Kyber.
4. Why did you choose to build BENQI on the Avalanche protocol?
The Avalanche protocol offers both users and developers a network that's fast, cost-efficient and scalable.
By pioneering industry-leading features such as the Avalanche consensus mechanism, the Avalanche Bridge, Avalanche Subnets and Core Wallet, BENQI believes Avalanche is positioned to grow the already-flourishing community of users and developers on the network.
5. What does BENQI offer developers?
Developers can build applications leveraging BENQI's suite of protocols.
Both BENQI's Liquidity Market and Liquid Staking protocol provide deep liquidity for Avalanche developers to tap into. Additionally, these protocols offer yield-bearing receipt tokens which can be freely utilized within applications building on Avalanche.
Applications that could be built around BENQI include yield aggregators, CDP/stablecoin protocols, smart contract automation platforms and DeFi wallets.
6. What are the benefits of holding QI tokens?
The QI token is the governance token overseeing the entire BENQI ecosystem. It is required to vote and steer the future development of the protocol. QI holders play an important role in the development and growth of BENQI.
A future feature, veQI grants holders delegation power to direct AVAX from BENQI's Liquid Staking pool to their Avalanche validator of choice. This essentially provides additional rewards to Avalanche validators and assists future subnets in the bootstrapping of their validator nodes.
7. Why is BENQI excited to partner with Wirex?
Wirex's approach aligns with the vision of BENQI.
As a truly global company that understands the importance of self-custody, this partnership is a catalyst for growth and bridging the gap between traditional finance and decentralized finance.
We develop protocols to maximize the potential of DeFi, and Wirex makes it easy for everyone to access crypto and DeFi. It's a very synergistic partnership.
8. How has the DeFi space changed since you launched in 2021?
The DeFi space has matured since we launched in 2021. We're seeing more emphasis on transparency and sustainability. The collapse of several big protocols and companies during the past few months have highlighted the importance of those points, so it's a positive sign to see this perspective shift from users and builders.
We're definitely excited to see this shift and we believe that DeFi will be at the forefront of innovating traditional finance in the coming years.
9. What’s in store for BENQI in the future?
Be on the lookout for the release of veQI.
Vote-escrowed QI, veQI provides Avalanche validators the delegation power to gain additional AVAX delegations from BENQI's Liquid Staking pool. Through veQI, validators, subnets and DAOs will be able to bootstrap their validator nodes.
10. What’s one interesting fact about BENQI that we might not know?
BENQI is the first protocol to hit the $1 billion Total Value Locked (TVL) milestone on Avalanche. Also, if you're a true Avalanche fan, have a look at our Q&A with John Nahas, Vice President of Business Development at Ava Labs for more exclusive insights!
And if you're a true Avalanche fan, have a look at our Q&A with John Nahas, Vice President of Business Development at Ava Labs for more exclusive insights!