BENQI overview

History of Benqi

Benqi was launched in August 2021 as a strategic effort to enhance the DeFi ecosystem on the Avalanche network. The project was developed by a team of blockchain and finance experts who recognized the need for efficient and scalable DeFi solutions. Since its inception, Benqi has rapidly gained traction in the DeFi space, attracting a significant number of users and liquidity providers to its platform.

Key milestones

1. Launch on Avalanche: The project was launched on the Avalanche C-Chain, a platform known for its high throughput and low latency, which provides a conducive environment for DeFi applications.
2. Partnerships and collaborations: Benqi has established partnerships with leading projects in the ecosystem to enhance its offerings and improve user experience.
3. Community growth: Over time, Benqi has cultivated a robust community of users and developers who contribute to the platform's development and governance.

How Benqi works

Benqi operates as a DeFi protocol offering two main services: liquidity market and liquid staking. These services are integral to the platform's goal of increasing capital efficiency and providing users with diverse investment opportunities.

Liquidity market

The liquidity market is a core component of Benqi's offerings. It allows users to participate in decentralized borrowing and lending, thereby earning interest on their digital assets or borrowing against them. The platform utilizes a system of smart contracts to automate and secure these transactions, ensuring transparency and security. Users can supply assets to the liquidity pool and earn a yield, while borrowers can access these assets by providing collateral.

Lending and borrowing mechanics

• Lending: Users can deposit supported digital assets into Benqi's liquidity pools, earning interest over time. The interest rates are dynamically adjusted based on supply and demand.
• Borrowing: By depositing collateral, users can borrow assets from the liquidity pools. The borrowing capacity is determined by the value of the collateral and the platform's risk parameters.

Liquid staking

Benqi also offers liquid staking services, enabling users to stake their Avalanche-based tokens while maintaining liquidity. This service allows users to earn staking rewards without locking their assets, providing flexibility and additional income opportunities.

Staking process

• Token staking: Users can stake their tokens through Benqi's platform, receiving a derivative token representing their staked position.
• Rewards: Staked tokens earn rewards, which are distributed to users in the form of additional tokens.
• Liquidity: The derivative tokens can be used within the DeFi ecosystem, providing users with the ability to leverage their staked assets in other protocols.

Governance and tokenomics

Benqi utilizes a governance model that empowers its community to participate in decision-making processes. The platform's native token, QI, plays a central role in governance and incentivization.

QI token utility

• Governance: QI holders can propose and vote on changes to the protocol, influencing its development and future direction.
• Incentives: The token is used to reward users for participation in the platform, such as providing liquidity or staking.
• Fee reduction: Holding QI tokens may offer users reduced fees on the platform, enhancing their overall experience.

Governance structure

The governance structure of Benqi is designed to be decentralized, allowing community members to have a say in protocol upgrades, parameter adjustments, and other critical decisions. This approach fosters a collaborative environment where stakeholders can contribute to the platform's long-term success.

Security and audits

Security is a paramount concern for Benqi, and the platform has undergone multiple audits to ensure the integrity of its smart contracts. These audits are conducted by reputable third-party firms specializing in blockchain security. By prioritizing security, Benqi aims to provide a safe environment for users to engage in DeFi activities.

Smart contract audits

Benqi's smart contracts have been rigorously tested to identify and mitigate potential vulnerabilities. Regular audits help maintain user confidence and trust in the platform, reinforcing its commitment to security and transparency.

Risk management

In addition to audits, Benqi implements various risk management strategies to safeguard user funds. These measures include over-collateralization, liquidation mechanisms, and continuous monitoring of the system to address any emerging risks promptly.

Developer engagement

Benqi encourages developers to build on its platform by providing comprehensive resources and support. This engagement helps expand the platform's ecosystem and introduce new functionalities and integrations.