BENQIQI to BTC

In this article, you'll learn more about BENQI, a decentralized liquidity market protocol constructed on the Avalanche blockchain. You will learn how BENQI enables permissionless, non-custodial lending, borrowing, and interest income on Bitcoin assets. You will also discover its cutting-edge features, which include flash loans, yield farming, and dynamic interest rate models. These features are designed to maximize capital use and offer consumers in the DeFi ecosystem attractive rates.

What is BENQI (QI)?

BENQI is a decentralized non-custodial liquidity market as well as a liquid staking protocol built on the high-speed Avalanche smart contract network. The lending protocol allows users to lend, borrow, or earn interest using their digital assets. The Liquid Staking protocol provides a solution for capital efficiency, offering users the opportunity to unlock their “staked” AVAX to be used on Decentralized Financial protocols. To guarantee effective capital utilization and competitive interest rates for users, BENQI employs brilliant methods like yield farming, flash loans, and dynamic interest rate models.

The founding team chose Avalanche because of its decentralized network’s claimed high scalability, low fees, and compatibility with popular plugin wallets.

When Was BENQI Formed?

BENQI was founded in 2021 with $6 million in backing. It has a long list of strategic investors. Some of them are Ascensive Assets, Dragonfly Capital, Mechanism Capital, Arrington XRP Capital, Spartan Group, TRGC, Woodstock Fund, Ava Labs, Morningstar Ventures, GBV Capital, Skynet Trading Ltd, Rarestone Capital, Genblock Capital, Moon Inc.

Who Are the Founders of BENQI?

Rome Blockchain Labs Inc. is responsible for the development of BENQI. It is an incubator and a software development firm specializing in decentralized finance (DeFi). JD Gagnon is one of the co-founders and CEO of Rome Blockchain Labs. The two other co-founders are Hannu Kuusi and Alexander Shul.

JD Gagnon graduated with a Bachelor’s degree in commerce in finance and accounting from the University of Alberta in Edmonton, Canada. Before Rome Blockchain Labs, Gagnon created the Velox algorithmic trading platform. Gagnon is also the founder and CEO of Scotch & Ramen Media, Inc. and CSO of Etheralabs, Inc.

Hannu Kuusi has experience building institutional-grade infrastructure for financial technology (fintech) and military applications.

Alexander Szul is in charge of managing the development of the BENQI liquidity market platform.

What Makes BENQI (QI) Unique?

BENQI (QI) claims to be the first DeFi Lending project on the Avalanche platform. It offers DeFi users from congested and centralized networks the option to move and place their unused assets on BENQI with no hurdles and low network fees. Avalanche allows BENQI users to seamlessly and affordably access decentralized financial services and increase control over their strategies.

Developers have the option to use BENQI to create financial products using the protocol and governance tokens.

By giving Ethereum users a quicker and less expensive option, BENQI also seeks to lessen the strain on the network. Members of BENQI have access to the shared liquidity market for liquidity withdrawals, the liquidity market for loans, and a clear view of interest rates.

What Are the Potential Use Cases for BENQI?

1. BENQI wants to give consumers a place where they can use their digital assets to lend, borrow, and possibly even earn market yields.
2. Additionally, by enabling users to unlock their staked AVAX for use on decentralized financial protocols, it aims to provide a capital-efficient solution. 
3. With BENQI, developers can use the protocol and governance tokens to construct financial products. 
4. In order to lessen the strain on the Ethereum network, BENQI also seeks to provide users of Ethereum with a speedier and maybe less costly alternative.
5. In addition, QI token holders can propose ideas, cast votes on matters, and engage in project development through BENQI's governance structure.

What Risks Should Users Be Aware of When Using BENQI?

When engaging with BENQI, users should be cognizant of several potential risks. These risks are as follows: 

• Smart Contracts

One such risk pertains to smart contracts. BENQI interacts with a multitude of smart contracts, which could present both known and unknown risks. These risks might result in the malfunction or vulnerability of the smart contracts, potentially leading to assets being inaccessible or lost. 

• Liquidation 

Another risk is associated with liquidation. 

The value of assets supplied or borrowed on the protocol might vary due to systemic risks of the issuing platforms or market volatility. This could potentially lead to the liquidation or closing of a user's position.

• Chances of Vulnerability 

BENQI aims to enhance capital efficiency and security through risk assessment and management. There are also continuous security audits. However, these measures do not completely eradicate risks. Users are advised to carefully consider the risks associated with supplying assets, particularly in the role of a liquidity provider.

• Possibilities of Financial Losses

BENQI functions within the swiftly changing domains of blockchain technology and decentralized finance (DeFi), both of which carry inherent hazards. There is a risk of financial loss while using the BENQI protocol, especially when lending, borrowing, and yield farming because of aspects like market turbulence, vulnerabilities in smart contracts, and changes in regulations. It is recommended that users comprehend and acknowledge these risks before using BENQI's platform.

• Unanticipated Interruptions

A number of outside variables that are out of its control can affect BENQI's performance and sustainability, such as network congestion, security lapses, and modifications in user behavior. Although BENQI works hard to give DeFi participants a safe and effective platform, it cannot ensure that there won't be any unanticipated difficulties or interruptions.

Conclusion

It is important to keep in mind that before using BENQI's protocol, users should evaluate their risk tolerance, do extensive research, and, if necessary, obtain independent financial counsel. Users should acknowledge and accept the risks and obligations connected with using BENQI's platform.