Benqi (QI)

Lending and Borrowing

Benqi allows users to lend their digital assets to earn interest or borrow assets by providing collateral. This happens in both core markets (for highly liquid assets like AVAX and USDC) and isolated markets, making it easy to manage loans and earn yields.

Liquid Staking

Users can stake AVAX through Benqi’s liquid staking protocol and receive sAVAX tokens. These tokens represent staked AVAX plus rewards and can be used across many DeFi applications, increasing capital efficiency without locking up assets.

Validator and Subnet Deployment

Benqi’s Ignite service helps users launch and run Avalanche validators and subnets quickly and with minimal upfront capital. This supports institutions, developers, and Web3 users in participating in network validation.

Governance and Rewards

The QI token is used for governance, staking, and earning rewards. Staking QI earns BENQI Miles, which can be used to vote on protocol decisions and participate in the platform’s evolution.

Cross-Chain and DeFi Integration

Benqi aims to bridge Avalanche with other blockchains like Ethereum, Polkadot, and Binance Smart Chain through Avalanche’s subnets, enhancing interoperability and expanding DeFi opportunities.

Advantages

• Benqi is a decentralized, non-custodial liquidity market and liquid staking protocol built on Avalanche, allowing users to lend, borrow, and earn interest on digital assets easily.
• It offers liquid staking of AVAX, where users receive sAVAX tokens that accrue value and can be used in DeFi, improving capital efficiency.
• The platform supports multiple cryptocurrencies including AVAX, WETH, WBTC, USDC, USDT, and DAI.
• Benqi has a strong presence in the Avalanche ecosystem with high total value locked (TVL) and extensive integrations.
• Users can earn passive income by supplying liquidity or staking assets.
• The protocol has a governance token (QI) that allows holders to participate in project decisions.
• Trading volume and market activity have shown recent increases, indicating growing interest.
• Benqi offers low network fees and seamless access to decentralized financial services on Avalanche.

Disadvantages

• The price of Benqi’s token (QI) has experienced significant declines recently and is currently ranked relatively low in the crypto market.
• The market for Benqi is relatively small, so large holders ("whales") can influence price movements significantly.
• There are inherent risks such as smart contract risks and liquidation risks when using the protocol.
• Some users have noted a lack of full transparency in governance and reward distribution.
• MetaMask wallet does not currently support Benqi tokens, which may limit wallet options for some users.
• The platform’s success depends on the Avalanche network and its ecosystem performance.
• Price volatility is high, and the token has underperformed compared to other Avalanche ecosystem cryptocurrencies recently.

Founders of Benqi

Benqi was founded by three main co-founders: JD Gagnon, Hannu Kuusi, and Alexander Szul. They started the project through their firm, Rome Blockchain Labs Inc., launching the protocol in 2021. Dan Mgbor is also mentioned as a founder and CEO in some sources, associated with the founding of Benqi in 2021.

• JD Gagnon: Co-founder, involved in the development and leadership of Benqi.
• Hannu Kuusi: Co-founder, with extensive experience in ICT and early crypto involvement.
• Alexander Szul: Co-founder, manages the development of the Benqi liquidity market platform.
• Dan Mgbor: Also recognized as a founder and CEO, linked to the founding of Benqi.

These founders brought together their expertise to build Benqi as a DeFi protocol on Avalanche.

Investors in Benqi

Benqi has raised around $6 to $9 million in funding from a group of strategic investors. Key investors include Ascensive Assets, Dragonfly Capital, Mechanism Capital, Arrington XRP Capital, Spartan Group, Ava Labs, Genesis Block Ventures, Rarestone Capital, Morningstar Ventures, Skynet Trading, TRGC, Vendetta Capital, ZBS Capital, Genblock Capital, Woodstock Fund, Moon Inc., and TRG Capital. These investors have supported Benqi in its development as a DeFi liquidity protocol on Avalanche.

Halal Status of Benqi

Benqi is considered halal according to Shariah analysis available on Sharlife. This is because it functions as a decentralized liquidity market and lending platform without involving interest (riba) in a way that breaks Islamic ethical codes. The halal status depends on the use of the token for permissible investment purposes.

Reasoning

Benqi operates by allowing users to lend, borrow, and earn rewards on digital assets within the Avalanche ecosystem. Its structure aligns with Islamic finance principles as it avoids interest-based transactions and speculative practices that are typically considered haram. The platform's adoption and liquidity provision are seen as legitimate economic activities under Shariah law.