BENQI Finance is a non-custodial DeFi platform on Avalanche that enables users to lend, borrow, and stake assets like AVAX while earning yield—all without intermediaries. With features like liquid staking (sAVAX), real-time interest accrual via qTokens, and governance through the QI token, BENQI offers a secure, efficient way to put your crypto to work in the Avalanche ecosystem.
BENQI Finance is a non-custodial liquidity market protocol built on the Avalanche blockchain. In simpler terms, it's a platform where users can lend, borrow, and earn interest on their crypto assets without needing permission from any central authority.
Founded in 2021, BENQI was designed specifically for the Avalanche ecosystem, taking advantage of the network's fast transaction speeds and low fees. It has quickly become one of the leading DeFi platforms on Avalanche with hundreds of millions in total value locked (TVL).
Key takeaway: BENQI is an Avalanche-based DeFi platform that lets you lend, borrow, and earn interest on your crypto without intermediaries.
The Core Components of BENQI Finance
BENQI Liquidity Market
The liquidity market is BENQI's primary offering. Here's how it works:
When you deposit assets into BENQI, you receive qTokens (like qAVAX or qUSDC) that represent your deposit plus accrued interest. These tokens can be withdrawn for your original assets plus interest at any time.
BENQI Liquid Staking
One of BENQI's standout features is its liquid staking solution for AVAX, Avalanche's native token. Traditional staking locks up your AVAX for a set period, but BENQI's liquid staking gives you a token called sAVAX in return.
This sAVAX represents your staked AVAX plus staking rewards, but unlike directly staked AVAX, you can use sAVAX in other DeFi applications while still earning staking rewards. It's essentially a way to "double-dip" on your AVAX holdings.
Key takeaway: BENQI's liquid staking lets you earn staking rewards while still keeping your assets usable in other DeFi applications.
BENQI Lending Protocol
The lending protocol allows users to:
Interest rates on BENQI adjust based on utilization ratios — when more borrowing occurs, rates increase to incentivize more deposits and fewer loans.
The QI Token: BENQI's Governance Asset
QI is BENQI's native governance token. Holding QI gives you:
The token follows a fair distribution model, with allocations for community incentives, development, and treasury reserves. Early users of the platform were rewarded with QI tokens, creating a community-oriented ownership structure.
Key takeaway: The QI token gives holders a say in BENQI's future direction and access to platform benefits.
BENQI on Avalanche: A Strategic Partnership
BENQI chose to build on Avalanche for several compelling reasons:
The partnership runs deep, with Avalanche Foundation having directly supported BENQI's development. This strategic alignment means BENQI often receives early access to Avalanche ecosystem updates and integrations.
Is BENQI Safe to Use?
As with any DeFi platform, there are risks to consider:
BENQI has implemented several safeguards:
Remember that even the best DeFi platforms carry inherent risks, so never invest more than you can afford to lose.
Getting Started with BENQI Finance
Ready to try BENQI? Here's how to begin:
For new users, starting with simple AVAX staking might be the easiest entry point before exploring more complex strategies.
