Benqi (QI)

Overview

BENQI is a group of decentralized finance, or DeFi, products built on Avalanche. Its token, QI, helps connect those products. BENQI lets people supply digital assets to lending pools, borrow against assets they deposit, stake AVAX while receiving a usable token, and take part in decisions about where staked AVAX is delegated. It also offers tools for running Avalanche validators—the computers that help secure the network. (docs.benqi.fi)

BENQI’s products serve different purposes. BENQI Markets handles lending and borrowing. BENQI Liquid Staking issues sAVAX to people who stake AVAX. Ignite provides validator infrastructure, while Node Voting gives QI stakers a role in selecting validators for part of BENQI’s staking pool. Together, these products make QI more than a token used for one lending market. (docs.benqi.fi)

History & Team

Launch and early support

BENQI launched on Avalanche in August 2021. Rome Blockchain Labs says its founders—JD Gagnon, Hannu Kuusi, and Alexander Szul—partnered with Avalanche supporters to launch the project. Its first focus was a liquidity market where users could supply assets and borrow against collateral. Liquid staking and validator services broadened the project’s scope later. (romeblockchain.com)

Before launch, BENQI announced a $6 million private funding round in April 2021. Ascensive Assets led the round. Named participants included Mechanism Capital, Dragonfly Capital, Arrington XRP Capital, The Spartan Group, Ava Labs, and several other investment groups. The funding supported development of the Avalanche-based liquidity market. (globenewswire.com)

The project’s history also shows a gradual approach to governance. BENQI describes Node Voting as an early use of community voting power, while its founding team continues to manage broader protocol decisions. That distinction matters when considering what QI holders can do now and what BENQI plans to make available through future governance. (docs.benqi.fi)

Technology & How It Works

Lending and borrowing

BENQI Markets uses smart contracts—programs on Avalanche that follow preset rules—to manage deposits and loans. A supplier deposits an asset into a pool and can earn interest. A borrower deposits collateral, then borrows from a pool. Loans are overcollateralized, meaning the borrower must provide assets worth more than the amount borrowed. This allows the system to manage loans through contract rules rather than a traditional loan officer. (docs.benqi.fi)

Borrowing and lending rates respond to a pool’s utilization: the share of supplied assets that borrowers have taken out. As utilization rises, BENQI’s interest-rate model raises borrowing costs to encourage more deposits and reduce demand for loans. The protocol also sets a collateral factor for each asset, which limits how much can be borrowed against it. If a loan’s collateral falls below the required level, a liquidator can repay part of the debt and receive some collateral under the market’s rules. (docs.benqi.fi)

BENQI separates its Core Markets, which focus on widely used assets such as AVAX and USDC, from Avalanche Ecosystem Markets for a broader set of assets. The latter use separate market rules so that the conditions of one market have less effect on another. In these ecosystem markets, users can borrow USDC against supported positions. (docs.benqi.fi)

Liquid staking

Avalanche staking takes place on its P-Chain, while many DeFi applications run on its C-Chain. BENQI lets users start with AVAX on the C-Chain and receive sAVAX, a token representing their share of AVAX staked through the protocol. BENQI handles the movement needed to put that AVAX to work in staking. As staking rewards accrue, each sAVAX represents an increasing amount of underlying AVAX rather than paying rewards as a separate stream of tokens. (docs.benqi.fi)

Because sAVAX is transferable, it can also be used in supported lending markets and other DeFi applications. Someone redeeming it through BENQI’s unstaking process follows an unlock period; someone using a secondary market can swap it for AVAX under that market’s terms. These are two different ways to access AVAX represented by sAVAX. (docs.benqi.fi)

Tokenomics & Utility

QI’s documented total supply is 7.2 billion tokens. BENQI allocated 3.24 billion QI, or 45% of that supply, to community incentives. Other allocations include 1.08 billion for the foundation, 720 million for core contributors, 360 million for exchange liquidity, and portions for seed, private, and public sales. The allocations were designed to support development, participation, and access to the token. (docs.benqi.fi)

QI’s central use is staking for BENQI Miles, formerly called veQI. Miles build over time while QI remains staked and provide voting power in Node Voting. Holders can direct that power toward eligible Avalanche validators. Under BENQI’s documented system, 35% of delegations from its liquid staking pool go through the Miles voting pool; the remaining 65% go through an open pool for qualifying validators. Unstaking any QI resets the holder’s accumulated Miles balance. (docs.benqi.fi)

QI also has uses beyond voting. BENQI describes it as a supported asset in its lending markets, and Ignite’s validator services include ways to stake or pay with QI. The project’s stated longer-term goal is to expand token-holder governance, while Node Voting provides a defined role today. (docs.benqi.fi)

Ecosystem & Use Cases

A BENQI user can combine several activities within Avalanche. For example, they can deposit AVAX into a lending market and use it as collateral to borrow USDC. Alternatively, they can stake AVAX, receive sAVAX, and use that token in a supported DeFi application while the underlying AVAX earns staking rewards. QI holders can stake their tokens to build Miles and vote for validators. These uses show how lending, staking, and network participation fit together. (docs.benqi.fi)

BENQI’s Ignite product addresses a different need: launching an Avalanche validator. Its pay-as-you-go option supplies the AVAX needed for validator staking in exchange for a fee, while its QI-staking option supports automated validator operation under a different arrangement. Ignite is aimed at people or teams that want validator access without assembling the full staking amount themselves. (docs.benqi.fi)

Developers can also build around BENQI’s pools and contracts. The project documents access to smart contracts and data tools for applications such as dashboards and automated services. This gives its lending markets and sAVAX a role beyond BENQI’s own interface. (docs.benqi.fi)

Advantages & Challenges

BENQI’s main strength is the range of functions gathered within one Avalanche ecosystem. Its lending markets provide access to pooled assets, sAVAX lets staked AVAX remain usable in supported applications, and Node Voting connects QI staking with validator selection. Ignite adds a service for people who want to operate validators. Each product addresses a different task while making use of Avalanche’s infrastructure. (docs.benqi.fi)

The design also has trade-offs. Borrowers must keep enough collateral behind their loans, and changing asset values can cause a position to be liquidated. Lending rates change with demand rather than staying fixed. Liquid staking requires a redemption process when users unstake through BENQI. Across the suite, smart contracts and validator operations add technical work that the protocol must maintain. BENQI publishes audit information for its lending, staking, and Ignite products. (docs.benqi.fi)

Governance is another area still developing. Miles holders can influence a defined share of AVAX delegations, while the founding team currently controls broader protocol governance. Expanding that role would change how decisions are made across BENQI’s products. (docs.benqi.fi)

Where to Buy & Wallets

QI is available on Coinbase and Binance, subject to the services each platform offers in a user’s region. On Binance, QI is available through supported spot and conversion options. Exchange access is separate from using QI in BENQI’s on-chain products: a holder must move tokens to a compatible self-custody wallet to interact with those products directly. (coinbase.com)

QI can be held in wallets that support the Avalanche C-Chain, including Core and MetaMask. Core has Avalanche support built in; MetaMask can be connected to the Avalanche network. An Avalanche C-Chain transaction uses AVAX for network fees, so interacting with BENQI from a wallet also requires some AVAX there. The C-Chain is the relevant network when moving QI for use in BENQI’s applications. (support.avax.network)

Regulatory & Compliance

Rules for crypto assets and the services built around them depend on jurisdiction. In the United States, the Securities and Exchange Commission has issued guidance on how securities laws apply to different crypto assets and transactions. That framework considers an asset’s features and the circumstances in which it is offered or sold. In the European Union, the Markets in Crypto-Assets regulation, or MiCA, sets rules for covered crypto-asset services and their providers. BENQI’s own terms also restrict access from certain jurisdictions and by sanctioned persons. (sec.gov)

Islamic finance adds a separate question about the activity being performed. BENQI Markets pays suppliers interest and charges borrowers interest. Islamic finance generally prohibits interest-based lending and borrowing as riba, so those lending-market activities do not align with interest-free Islamic finance principles. QI staking for Miles and AVAX staking through sAVAX serve different purposes from borrowing and lending; assessing them involves their own structure and use. (docs.benqi.fi)

Future Outlook

BENQI’s future development centers on how its products work together and how decisions about them are shared. Its documentation describes broader governance through BENQI Miles as a goal beyond the existing Node Voting feature. It also identifies further lending-market development and integrations as areas of work. Those plans build on products already serving distinct needs: asset markets, liquid staking, and validator infrastructure. (docs.benqi.fi)

QI’s role will depend in part on how much responsibility token holders gain in that process. Today, Miles provide a concrete way to influence some validator delegations. Broader voting over protocol matters would give holders a different level of participation. (docs.benqi.fi)

Summary

BENQI began as an Avalanche lending market and grew into a suite covering borrowing, liquid staking, validator services, and Node Voting. QI links those activities through incentives, staking, and participation in validator selection. Understanding BENQI means looking at the products separately—and at how its token helps connect them across the Avalanche ecosystem. (docs.benqi.fi)