Algorithmic liquidity market protocol on Avalanche

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As the cryptocurrency industry has opened up a new path to the global economy of the future, crypto borrowing and lending are important services for new entrants and experienced traders looking to increase their income.

As decentralized finance (DeFi) solves some problems on the Ethereum blockchain, Avalanche-based BENQI is entering this market in the hope of solving them with its algorithmic liquidity market protocol.

What is BENQI?

Built on the Avalanche platform, BENQI is a decentralized and non-depository liquidity market protocol.

Via the protocol, users can easily lend, borrow and earn interest with their digital assets. As such, users can earn passive income by lending, and borrowers have the potential to borrow oversized.

What is an avalanche?

Avalanche is an open source platform that was created to create and launch dapps, as well as other blockchains. With a transaction throughput of 4,500 tps, the ecosystem is highly scalable to manage global finance.

Its native token, AVAX, is used to pay transaction fees and secure the network by staking. In addition, it also serves as a unit of account among the many assets available on the platform.

Who should use BENQI?

Founded by a group of people deeply rooted in the Ethereum ecosystem and decentralized finance, BENQI aims to solve the problems that occur on Ethereum by providing a liquidity market protocol on a highly scalable decentralized platform.

Since the DeFi boom of 2020, Ethereum has experienced congestion that has started driving high network fees, which is currently a major obstacle for users.

The BENQI team realized that Avalanche could potentially be the next successor to smart contracts and assets that could lighten the load on Ethereum and provide frictionless transactions for the user.

Although the Avalanche ecosystem is still in its infancy with a small number of DeFi protocols, the team discovered that it was the first to enter the Avalanche network with a loan and borrow protocol.

With a focus on ease of use and low fees, the BENQI protocol democratizes access to decentralized financial products by providing a place where users are supported to instantly provide and withdraw cash, or by using their assets. provided as a guarantee of a shared liquidity market.

In addition, it offers a live and transparent view of interest rates around the clock based on market supply and demand for the asset.

BENQI is also a bridge to connect Ethereum to the Avalanche bridge (AEB.xyz), therefore, the protocol can provide existing users on Ethereum with a cheaper and faster alternative money market by removing a $ 300 gwei fee on Ethereum as well as 3 minutes required for transactions.

Since being the first lending and borrowing protocol on Avalanche as the foundational layer of DeFi, BENQI uses a time-based approach to calculate rates on the platform to give users the best rates. precise.

The fees for transacting with the protocol are negligible due to the network BENQI is built on and smart contracts streamlined. BENQI also enables AVAX borrowing and lending, with other UTXO-based coin integrations when ready over the network.

How does BENQI work?

The platform works by allowing users to deposit their assets which will then be added to a pool that can be borrowed by others. As a result, users who lend cash to the protocol are able to earn passive income and those who borrow can do so in an oversized fashion.

The funds stored in BENQI are managed by smart contracts. Initially, the governance of BENQI will be led by the founding team of the project, then will finally be delegated to a Decentralized Autonomous Organization (DAO) using IQ tokens.

QI token holders can make suggestions or vote on issues to drive the protocol.

Its key channel is the BENQI DAapp.

BENQI token (QI)

The QI token is a native asset on Avalanche and feeds the BENQI protocol. QI is required to have the right to vote and to decide the outcome of the proposals via the BENQI Improvement Proposals (PIF).

The total supply of IQ will be 7,200,000,000 tokens and will be distributed as follows:

  • Liquidity Extraction Program: 45% (3,240,000,000 IQ Tokens)
  • Token sale: 25% (1,800,000,000 IQ tokens)
  • Cash: 15% (1,080,000,000 IQ tokens)
  • Team: 10% (720,000,000 IQ tokens)
  • Exchange liquidity: 5% (360,000,000 IQ tokens)

Supply / Deposit / Withdrawal on BENQI

There is no limit for imposed deposits. Users can deposit any amount. They are allowed to withdraw assets that are not actively used for borrowing and do not cause their loans to liquidate.

Users who deposit their tokens will receive interest on their assets which will algorithmically adjust according to the market. Each asset has its supply and demand market with its corresponding annual percentage return (APY) changing over time.

The QiToken presents the balance of the user’s assets provided to the BENQI protocol. It is sent to the wallet when users provide assets to the protocol and operate to accumulate value against the original asset through the token interest rate.

QiTokens issued will be based on the underlying asset provided to the protocol such as QiAVAX, QiLINK, QiWBTC or QiUSDT.

BENQI’s vision

The vision of the protocol is to launch BENQI Avalanche subnets which are similar to Polkadot Parachains and Compound Cash but without the constraints of the virtual machine (VM) and the pains of a limited number of Parachain slots.

Therefore, validator nodes can run the virtual machine of their choice and have custom requirements for validator nodes to meet greater regulatory compliance for institutional networks. Thanks to the BENQI subnets, institutions will be able to create networks and platforms that comply with regulations without being subject to VM constraints.

In addition, the BENQI team will be able to provide institutions with concrete information on how the BENQI money markets are used as the main stack by taking BENQI v1 and v2 as a benchmark.

The team has taken important steps since the creation of the BENQI protocol. The algorithmic liquidity protocol on the Avalanche blockchain reached a total of over $ 2.5 billion in total locked-in value (TVL) after its launch on the Avalanche network, which also proves the explosive growth of the lending service and DeFi loan.

In April, the team had also raised $ 6 million in a private fundraiser led by Ascensive Assets with the participation of several leading investors in the blockchain and the emerging Avalanche ecosystem such as Dragonfly Capital, Arrington XRP Capital, Mechanism Capital, Morningstar Ventures, Vendetta Capital. , TRGC, Genesis Block, among others.

A public sale of the IQ token on the Pangolin exchange has sold out.

BENQI has not only become the premier protocol in Avalabs’ venture capital portfolio, but also the global KOL and VC representations.

Launch products with a clear go-to-market strategy including low fees, support other assets not available to a competitor, and complete publishing on testnet with UI / UX for webpage and mobile.

As part of the strategic pipeline, BENQI is preparing to launch governance with v2 and flash loans, introduce new assets through governance voting and allocate credit to the portfolio to unlock additional platform functionalities. .

Its competitors are mostly on Ethereum, with the transaction alone making it impossible for most users to earn interest rates.

Additionally, deployment on Binance Smart Chain (BSC) still puts users at risk of shutting down the network at any time and losing access to their assets.

BENQI is built on Avalanche, which is currently decentralized with over 900 validating nodes running while BSC only has 21 nodes which mostly belong to a single entity.

To learn more about BENQI – please click here!


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