CAI’s third constituent: QI

CAI, Colony Avalanche Index, is the benchmark index for investors wanting to get exposure to the Avalanche ecosystem. It will be composed of the native token AVAX, and the most prominent projects in the ecosystem, such as QI (BENQI).

In this article, we will detail what makes BENQI one of the most sophisticated liquidity market protocols in the DeFi space and look into the factors that make it a blue chip in the Avalanche ecosystem.

What is BENQI (QI)?

Built on Avalanche, BENQI operates as a liquidity market and advanced DeFi staking protocol. BENQI was the very first recipient of the Avalanche Rush initiative and the first protocol to hit the $1billion TVL mark on Avalanche, growing to as fast as $4.4 billion TVL locked by December 2021.

The BENQI protocol consists of:

• BENQI Liquidity Market (BLM)
• BENQI Liquid Staking (BLS)

The BENQI Liquidity Market (BLM) protocol enables users to effortlessly lend, borrow, and earn interest with their digital assets. Depositors providing liquidity to the protocol earn yield, while borrowers are able to borrow in an over-collateralized manner.

The BENQI Liquid Staking (BLS) protocol is a liquid staking solution that tokenizes staked AVAX to grant users the ability to utilize the yield-bearing asset within DeFi applications.

BENQI: bridging the gap between DeFi and Traditional Finance

As the cryptocurrency industry has been creating a new path towards the global economy of the future, borrowing and lending crypto are important services for both new entrants and experienced traders looking to increase their income. And while DeFi has grown substantially in the last few years, due to high fees and/or protocols’ complexity there’s still a significant barrier for both old and new users to justify engaging in DeFi.

BENQI aims to alleviate these problems by providing a suite of DeFi protocols on the highly scalable and decentralized platform of Avalanche. With a focus on approachability, ease of use, and low fees, BENQI aims to democratize access to decentralized financial products by providing users access to:

Permissionless lending and borrowing (via BLM) where DeFi users can:

• Instantly supply to and withdraw liquidity from a shared liquidity market
• Instantly borrow from a liquidity market using their supplied assets as collateral
• Have a live and transparent view of interest rates around the clock based on the asset’s market supply and demand

Capital efficient staking product (via BLS) where Avalanche users can:

• Freely utilize locked up capital staked in validators in securing the Avalanche network
• Gain additional utility on their yield-generating asset by utilizing it within DeFi
• Seamlessly stake their AVAX on the Avalanche Contract Chain (C-Chain) with no lock-up periods or tedious cross-chain transfers

More to come!

As DeFi matures and creates inroads into the institutional and traditional financial world, it is imperative that additional DeFi solutions are created. This enables diversified yield options, improved risk management, and greater capital efficiency. BENQI is committed to enabling further democratization of financial products with additional protocols/improvements and currently has few new features under development, such as veQI, that will push their value proposition to another level.

About BENQI

Built on Avalanche’s highly scalable network, BENQI’s vision of bridging decentralized finance (DeFi) and institutional networks starts by launching BENQI on the Avalanche C-Chain. BENQI’s suite of yield-generating DeFi products consists of the BENQI Liquidity Markets and BENQI Liquid Staking.

BENQI’s Liquidity Markets allows users to earn interest on their supplied assets, and borrow any available asset from the platform in an overcollateralized manner.

BENQI’s Liquid Staking protocol is a liquid staking solution that tokenizes staked AVAX to grant users the ability to utilize the yield-bearing asset within Decentralized Finance applications.

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Disclaimer:

Provided for informational purposes only, this does not constitute professional and/or investment advice or financial advice. Please conduct your own research to properly evaluate the risks and benefits of any project.