BENQI (QI) is a market decentralized finance (DeFi) non-custodial liquidity protocol developed on the Avalanche network, aiming to enhance accessibility, scalability, and user experience in the DeFi space. The protocol was launched with a vision to democratize access to financial tools such as liquid staking and lending & borrowing. BENQI's ecosystem includes two main components: BENQI Liquid Staking (BLS) and BENQI Liquidity Market (BLM).
BENQI was established in 2021, supported by $6 million in funding. Its strategic investors include Ascensive Assets, Dragonfly Capital, Mechanism Capital, Arrington XRP Capital, Spartan Group, TRGC, Woodstock Fund, Ava Labs, Morningstar Ventures, GBV Capital, Skynet Trading Ltd, Rarestone Capital, Genblock Capital, and Moon Inc.
BENQI Liquid Staking allows users to tokenize their staked AVAX, transforming it into a yield-bearing asset that can be utilized within various DeFi applications. This innovative approach aims to unlock the value of staked coins, offering users the flexibility to earn yields without the restrictions typically associated with staking. The founding team selected Avalanche for its network's purported high scalability, minimal fees, and compatibility with widely-used plugin wallets.
On the other hand, BENQI Liquidity Market facilitates a platform where users can lend, borrow, and earn interest on their crypto assets. This is achieved through a permissionless and transparent system powered by smart contracts, enabling seamless transactions without the need for intermediaries.
The QI token, native to the BENQI protocol, serves dual purposes of governance and utility within the ecosystem. It allows token holders to participate in governance decisions through BENQI Improvement Proposals (BIPs), influencing the protocol's direction and development. Moreover, the token distribution is structured to reward active participants in the platform, with a significant portion allocated to liquidity mining and community incentives.
