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BENQI

BENQI is a (DeFi) protocol built on the , offering for AVAX, lending and borrowing, and infrastructure services. It is developed in collaboration with Rome Labs and has become one of ’s largest applications by (TVL), with reported TVL of $228,230,000, over 80,000 users, and more than 50 protocol integrations as of 2026.[1][7]

Overview

BENQI operates as a comprehensive hub on , designed to facilitate , lending and borrowing, and bootstrapping. The protocol’s core offerings include BENQI for AVAX, BENQI Markets for money market activities, and Ignite for launching validators and Subnets. BENQI aims to lower capital and technical barriers to participating in decentralized finance and securing the Avalanche network.[1]

The protocol has established itself as a major application on Avalanche, with deep liquidity and integrations across decentralized exchanges, lending markets, restaking protocols, and custodial platforms. Its products are structured to provide utility and yield opportunities for AVAX and other digital assets, while enabling both retail and institutional users to access Avalanche’s DeFi and staking ecosystem.[1][8][7]

History

BENQI launched on in August 2021 alongside the Avalanche Rush incentive program, receiving an initial $3 million allocation to bootstrap liquidity on its lending and platforms.[7] As the protocol scaled, a further $4 million in Avalanche Rush incentives was deployed after BENQI surpassed $2.8 billion in , $1 billion in borrows, and 14,000 users.[7]

Over time, BENQI expanded from its original lending markets into liquid and services, introducing BENQI Staking for AVAX and the Ignite validator infrastructure platform.[1] By early 2024 and into 2025, BENQI’s liquid staking product had become a core part of Avalanche’s staking ecosystem, with sAVAX accounting for a growing share of staked AVAX and thousands of active stakers using the protocol.[9][8]

By 2026, BENQI reported TVL of $228,230,000, over 80,000 users, and more than 50 integrations across DeFi protocols, wallets, and institutional platforms.[7] During this period, the protocol experienced both expansion and consolidation of its lending products, including the later wind-down of Avalanche Ecosystem Markets following an oracle-related risk management incident.[7]

Technology and Architecture

BENQI's architecture is built on the C-Chain, leveraging its high throughput and low transaction fees. The protocol comprises four main components, each serving a distinct function within the ecosystem: BENQI , BENQI Markets, Ignite, and Voting. Together, these contracts and services enable liquid of AVAX, lending and borrowing across core and isolated markets, and coordination and delegation on .[1]

BENQI Liquid Staking (BLS)

BENQI allows users to stake their tokens and receive sAVAX, a token. This sAVAX continually accrues value in AVAX from rewards and can be utilized across various DeFi protocols, including BENQI's own lending and borrowing platform, to earn additional yield while maintaining liquidity. A key feature of BLS is the ability for users to stake directly from the C-Chain, eliminating the need to bridge assets to the P-Chain, with bridging handled automatically using MPC-based infrastructure.[2][9]

The sAVAX token is designed to be widely integrated throughout the Avalanche ecosystem, enabling users to deploy it in automated market makers, lending platforms, yield aggregators, and restaking protocols while continuing to earn staking rewards.[9][10]

BENQI Markets (BLM)

BENQI Markets is a decentralized lending and borrowing protocol where users can supply their assets to earn interest or borrow funds through over-collateralized loans. The platform provides a user interface for monitoring all positions, including real-time and historical interest rate data to help users evaluate potential returns before depositing.[1][8]

It features two primary market types:

  • Core Markets: These are designed for highly liquid assets such as AVAX and , serving as the main lending and borrowing pools.
  • Ecosystem Markets: These markets support a broader range of assets, including long-tail and tokenized (RWAs). They incorporate specialized risk management frameworks to prevent volatility or liquidity issues in one market from affecting others, offering greater flexibility for DeFi participants.[2][1]

Ignite

Ignite is a solution developed by BENQI to simplify the process of launching and operating and Subnets. It addresses the technical complexities and significant upfront capital typically required for deployment, targeting institutions, developers, and advanced users seeking to run infrastructure on .[1]

Ignite offers two main options:

  • Pay-As-You-Go (PAYG): This option allows users to run a validator by paying a weekly fee, without requiring a large upfront stake. It is suitable for short-term use cases, such as MEV (Maximal Extractable Value) solvers.
  • Stake: Users can stake QI tokens and cover hosting fees to run automated , earning QI rewards without needing to manage technical details.[2][1]

Node Voting

Voting is a governance feature that enables holders of BENQI Miles tokens to support specific on the network. By voting with their BENQI Miles, users influence how AVAX from BENQI’s Pool is delegated to .[1][11]

The pool allocates AVAX with a 35/65 delegation split: 35% is delegated based on community votes via the BENQI Miles pool, while the remaining 65% is randomly allocated to all validators meeting minimum criteria. BENQI Miles can be accrued through a “Flex Option,” where miles accumulate gradually as users stake their QI, with full benefits after a specified period. A “Lock Option” has been proposed to allow instant mile accrual upon , but with a delayed exit period for unstaking.[1][11]

Security

BENQI prioritizes security through audits, risk management partnerships, and a public, open-source codebase to enhance transparency and mitigate risks. While no protocol is entirely risk-free, BENQI acknowledges potential and risks and employs external providers for monitoring and threat prevention.[1]

BENQI's security and risk partners include:

  • : Provides risk management and analytics.[2]
  • Hexagate: Offers real-time threat prevention solutions.[2]
  • Immunefi: Operates a bug bounty program for the protocol.[2]
  • zeroShadow: Contributes to security analysis and monitoring.[2]

QI Token

The native and of the BENQI ecosystem is QI. It plays a central role in the protocol's governance, incentive structure, and infrastructure services.[11]

  • Governance: QI token holders can stake QI to receive BENQI Miles (formerly veQI), which represent governance power within the ecosystem. BENQI Miles can be used to participate in governance processes such as Voting, directing AVAX delegations to , and are intended to extend to broader protocol governance as BENQI decentralizes.[11]
  • Utility: QI is distributed through programs to incentivize users to provide liquidity and participate in BENQI Markets and . Staked QI and accumulated BENQI Miles can also provide benefits such as discounts for Ignite’s Pay-As-You-Go validator services and enhanced influence over validator delegations. The total supply of QI is 7,200,000,000 tokens.[11]

Use Cases

BENQI supports several primary use cases within the DeFi ecosystem. Retail and institutional users can stake AVAX through BENQI to receive sAVAX, maintaining liquidity for trading, lending, and liquidity provision while earning underlying rewards.[9] sAVAX can be used as in lending markets, supplied to , or deployed in restaking protocols, enabling users to layer yields across multiple applications.[10]

Through BENQI Markets, depositors earn interest by supplying assets such as AVAX and , while borrowers access over-collateralized loans for trading, liquidity provision, or hedging strategies.[1] The platform’s updated interface, including historical interest rate data and yield projections, is designed to help users assess lending and borrowing opportunities more transparently.[8]

Infrastructure-focused users and institutions can use Ignite to launch Avalanche and Subnets with reduced upfront AVAX requirements, choosing between Pay-As-You-Go or QI-staked options to align costs and rewards with their operational needs.[1] Governance participants stake QI to accumulate BENQI Miles, using Voting to direct AVAX delegations to validators and influence the distribution of staking rewards.[11]

Ecosystem

BENQI functions as part of a broader DeFi ecosystem that includes decentralized exchanges, lending markets, restaking protocols, custodians, and gaming platforms. As of 2026, the protocol reported more than 50 integrations, reflecting its role as a liquidity and primitive for other applications.[7]

sAVAX is integrated across partner protocols for use in automated market makers, lending markets, and restaking platforms, allowing users to earn staking rewards while simultaneously deploying capital across DeFi strategies.[9][10] Integrations with custodial and wallet providers such as and Wallet extend sAVAX access to institutional clients and users moving funds from centralized custody to on-chain staking.[8]

Within Avalanche’s application layer, BENQI’s lending markets support assets like NXPC, connecting gaming ecosystems such as Nexpace and MapleStory Universe to DeFi borrowing and lending.[8] Collaborative initiatives with platforms like Pharaoh Exchange link BENQI’s to derivatives and trading venues, creating feedback loops between lending supply and leveraged trading demand.[8]

Products

BENQI’s product suite is organized around four primary offerings that together provide , lending, and infrastructure services on . BENQI allows users to stake AVAX and receive sAVAX, a transferable token that accrues staking rewards and is integrated across multiple DeFi protocols.[9]

BENQI Markets provides money markets for supplying and borrowing assets, with distinct Core Markets for highly liquid tokens and Avalanche Ecosystem Markets for a broader set of assets, including long-tail tokens and tokenized real-world assets.[1] Ignite offers and Subnet deployment services with Pay-As-You-Go and QI-staked options, targeting users who want to operate Avalanche infrastructure without managing hardware or large upfront capital requirements.[1]

The Voting system, powered by BENQI Miles, connects governance to validator incentives by allowing users to direct a portion of BENQI’s AVAX delegations to specific validators.[11] Together, these products position BENQI as both a liquidity hub and infrastructure layer within the Avalanche ecosystem.

Partnerships

BENQI has formed strategic partnerships to enhance its ecosystem and expand its offerings. Its foundational partnership is with , the on which the protocol is built, including a joint $3 million initiative launched in August 2021 to accelerate growth on the network.[7]

Within the ecosystem, BENQI has collaborated with other projects to expand its integrations and lending markets. It launched initial isolated Avalanche Ecosystem Markets with and Avax in July 2024, and later listed assets such as NXPC, connecting gaming-focused tokens to BENQI’s lending platform.[5][8]

BENQI has also partnered with institutional and infrastructure providers. integrated BENQI’s sAVAX, enabling institutional clients to stake AVAX and mint sAVAX through Anchorage’s custody infrastructure while accessing Avalanche’s ecosystem at institutional scale.[8] BENQI worked with Wallet to streamline access to sAVAX by reducing friction for users moving funds from custody to on-chain .[8]

In trading and liquidity, BENQI partnered with Pharaoh Exchange to connect lending markets with derivatives trading liquidity on Avalanche, positioning BENQI as a capital source that meets trader demand on Pharaoh’s platform.[8]

Funding

Since launch, BENQI has received over $7 million in incentives from the Rush initiative. The first $3 million was deployed in August 2021 alongside the protocol’s launch to incentivize liquidity provision and user adoption.[7] A subsequent $4 million tranche was allocated after BENQI surpassed $2.8 billion in , $1 billion in borrows, and 14,000 users, reflecting its early growth as a major DeFi protocol on Avalanche.[7]

Team and Governance

BENQI is developed in collaboration with Rome Labs, a development firm that provides engineering support for the protocol’s and infrastructure.[7] Governance is centered around the QI token and BENQI Miles, which represent staked governance power within the ecosystem.[11]

According to BENQI’s governance roadmap, the founding team initially oversees protocol decisions, with a stated plan for gradual decentralization toward a DAO structure in which QI holders and BENQI Miles participants vote on key parameters and upgrades.[11] Voting for AVAX delegation is the first major application of BENQI Miles-based governance, with broader protocol governance expected to expand over time.[11]

Developments

In 2025 and 2026, BENQI introduced several product and infrastructure updates. On May 10, 2026, the protocol launched a crosschain loan repayment feature that allows users to repay BENQI loans from any EVM-compatible chain without manually managing bridging routes, aiming to reduce friction for borrowers with assets spread across networks.[7] Earlier interface upgrades added real-time and historical interest rate data and deposit yield previews to the BENQI Markets UI, emphasizing transparency for lending and borrowing decisions.[8]

BENQI continued to expand sAVAX integrations across the ecosystem, including deployments in decentralized exchanges, lending markets, and restaking protocols, as well as integrations with Wallet and for streamlined access to by both retail and institutional users.[8][10]

On May 4, 2026, detected suspicious activity targeting its operational wallets, leading BENQI to pause its Avalanche Ecosystem Markets as a precautionary measure.[7] The Ecosystem Markets relied solely on the Chaos Edge , while BENQI’s Core Markets used a dual-oracle architecture with both and Chaos Edge Oracle, allowing Core Markets to transition to Chainlink-only feeds and remain operational.[7] Following the incident, BENQI announced on May 14, 2026, that it would wind down all assets in Avalanche Ecosystem Markets except NXPC, reducing factors by 50% on May 21 and to 0% on May 28 to allow users to close positions without impact to user funds.[7]

Chaos Labs characterized the operational wallet compromise as consistent with nation-state-level attacks but reported that the Chaos Oracle Network itself was not compromised and that no user funds were lost.[7] BENQI indicated that it was evaluating additional oracle providers as part of a broader effort to diversify its infrastructure and reduce dependencies on any single oracle system.[7]

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References (8 sources)

[1]
docs.benqi.fi

Introduction to BENQI

Jul 17, 2025

[2]
benqi.fi

BENQI Official Website

Jul 17, 2025

[3]
x.com

BENQI Twitter Account

Jul 17, 2025

[4]
messari.io

Messari – BENQI Profile

Sep 27, 2026

[5]
outposts.io

Outposts – BENQI Ecosystem Overview

Sep 27, 2026

[6]
docs.benqi.fi

BENQI Liquid Staking Overview

Sep 27, 2026

[7]
outposts.io

Outposts – sAVAX Integrations

Sep 27, 2026

[8]
docs.benqi.fi

BENQInomics – Overview

Sep 27, 2026

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