Crypto Gloss

BENQI

BENQI is an Avalanche-native DeFi protocol offering two distinct and complementary products: BENQI Lending (a decentralized money market protocol) and BENQI Liquid Staking (issuing sAVAX). Launched in August 2021, BENQI was one of the first major DeFi protocols deployed on Avalanche and played a significant role in establishing Avalanche’s DeFi ecosystem alongside Trader Joe, Pangolin, and Platypus Finance. BENQI Lending is a fork of Compound v2, enabling Avalanche users to supply and borrow assets including AVAX, USDC, USDT, wBTC, wETH, and other tokens within the Avalanche ecosystem, with lending rates determined by standard utilization-based interest rate models. BENQI Liquid Staking, launched in December 2020, issues sAVAX — a liquid staking token representing staked AVAX that continues to accumulate Avalanche network staking rewards (approximately 8-12% annually) while remaining transferable and DeFi-composable. sAVAX holders can use their tokens as collateral in BENQI Lending, on Trader Joe, or in other Avalanche DeFi protocols, solving the liquidity-staking trade-off that pure AVAX staking creates (staked AVAX: locked; sAVAX: tradeable). QI is the protocol’s governance token, distributing to liquidity providers and stakers as protocol incentives. BENQI has maintained its position as the leading liquid staking and lending protocol on Avalanche, with sAVAX consistently holding the largest AVAX liquid staking share and BENQI Lending holding among the highest TVL in Avalanche DeFi.

Key Facts

  • Protocol: BENQI
  • Network: Avalanche C-Chain (primary)
  • Launched: August 2021 (BENQI Lending); December 2021 (BENQI Liquid Staking)
  • Products: BENQI Lending + sAVAX liquid staking
  • Governance token: QI
  • Liquid staking token: sAVAX
  • Comparable to: Aave + Lido (combined on Avalanche)

sAVAX: Liquid Staking for Avalanche

sAVAX is BENQI’s primary product innovation:

Feature AVAX Staking sAVAX (BENQI Liquid Staking)
Staking reward ~8-12% APY ~8-12% APY (same)
Liquidity Locked (21-day unbonding) Fully liquid (trade anytime)
DeFi usability No Yes (collateral, LP)
Composability Zero High
Redemption 21-day wait Instant (market) or standard (wait)

BENQI Lending: Compound v2 on Avalanche

BENQI Lending mirrors Compound v2’s design:

  • Supported assets: AVAX, sAVAX, USDC, USDT, wBTC, wETH, LINK, BTCB
  • Interest model: Utilization-based rate curves
  • Supply: Earn interest automatically; receive qiTokens representing position
  • Borrow: Post collateral; borrow against it; pay variable interest
  • qiTokens: Receipt tokens (qiAVAX, qiUSDC, etc.) — accumulate interest

sAVAX Use Cases

The sAVAX composability flywheel:

  1. Stake AVAX → receive sAVAX (earn ~8-12% staking yield implicitly)
  2. Supply sAVAX to BENQI Lending → earn additional lending yield
  3. Borrow USDC against sAVAX → deploy USDC in other protocols
  4. Net APY: staking yield + lending yield – borrow cost
  5. Leveraged AVAX exposure via sAVAX: repeat borrow-stake cycle (with leverage risk)

Social Media Sentiment

Benqi is the dominant lending protocol on Avalanche. CT sentiment is moderately positive — the protocol has avoided major exploits and staked AVAX (sAVAI) is a core Avalanche liquid staking primitive. The broader Avalanche ecosystem slowdown (2023-2024) suppressed BENQI activity and QI token price. Recovery has been partial with Avalanche Subnets activity.

Last updated: 2026-04

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