BENQI (QI) is a decentralized liquidity market and liquid staking protocol that operates on the Avalanche smart contract network. It provides a platform for users to lend, borrow, and potentially earn market yields using their digital assets. Additionally, BENQI aims to enhance capital efficiency by enabling users to unlock their staked AVAX for use on decentralized financial protocols. The protocol was developed by Rome Blockchain Labs Inc., a software development firm with a focus on decentralized finance (DeFi). BENQI was launched in 2021 and has been striving to provide an alternative to Ethereum users that is potentially less expensive and faster.

BENQI operates by providing a platform for users to lend and borrow digital assets. Users can supply liquidity to the shared market and borrow from it using their supplied assets as collateral. The protocol also offers a liquid staking solution that tokenizes staked AVAX, giving users the ability to use, swap, or collateralize the yield-bearing asset within decentralized finance applications. BENQI's interest rate models dynamically adjust the interest rates of each asset market depending on the utilization rate, with the aim of ensuring healthy levels of available liquidity. The protocol also includes a governance mechanism, where QI token holders can vote on proposals affecting the protocol's key parameters.

BENQI aims to provide a platform for users to lend, borrow, and potentially earn market yields with their digital assets. It also seeks to offer a solution for capital efficiency by allowing users to unlock their staked AVAX for use on decentralized financial protocols. Developers can use BENQI to create financial products using the protocol and governance tokens. BENQI also aims to provide an alternative to Ethereum users that is potentially less expensive and faster, with the intention of easing the overloading of the Ethereum network. Furthermore, BENQI's governance mechanism allows QI token holders to participate in the development of the project, initiate proposals, and vote on issues.

BENQI was founded in 2021 by Rome Blockchain Labs Inc., a software development firm with a focus on decentralized finance (DeFi). The founding team includes JD Gagnon, Hannu Kuusi, and Alexander Shul. Prior to Rome Blockchain Labs, Gagnon created the Velox algorithmic trading platform and is also the founder and CEO of Scotch & Ramen Media, Inc. Kuusi has experience building institutional-grade infrastructure for financial technology and military applications, while Shul manages the development of the BENQI liquidity market platform. The protocol launched its own QI token on April 28, 2021, with a total supply set at 7,200,000,000 tokens.

BENQI strives to improve its ecosystem by integrating with other blockchains. This integration is intended to expand its reach and provide cross-chain liquidity. BENQI is integrated with Chainlink Proof of Reserve and Automation to help facilitate cross-chain asset lending and borrowing for BTC, ETH, DAI, USDC, and USDT. This integration allows BENQI to utilize Chainlink's decentralized oracles, enhancing the security and reliability of its cross-chain operations. BENQI has formed partnerships with Polygon, an Ethereum scaling solution, and Kylin Network, a DeFi project, to improve its data analytics capabilities and provide users with greater liquidity and access to a variety of DeFi tokens. These strategic partnerships and integrations strive to offer users a range of DeFi services.

When engaging with BENQI, users should be cognizant of several potential risks. 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. 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. Furthermore, while BENQI aims to enhance capital efficiency and security through risk assessment and management, as well as continuous security audits, 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.

The distribution plan for QI tokens is designed to encourage engagement with the protocol, aiming for balanced market utilization and a broad distribution of governance participants. The plan includes several allocations: 45% or 3,240,000,000 QI tokens are set aside for community distribution through liquidity mining incentive programs and various community initiatives. The team is allocated 10% or 720,000,000 QI tokens, which will be fully unlocked over four years, with quarterly unlocks and a 12-month cliff after public listing. The Treasury reserves 15% or 1,080,000,000 QI tokens, which may be allocated for fostering collaborations and with the intention of maintaining the protocol's functionality. These tokens vest quarterly over four years, with a 9-month cliff after public listing. Lastly, 5% or 360,000,000 QI tokens are reserved for facilitating liquidity on various trading platforms. Users may receive QI tokens as non-monetary rewards for their engagement with the platform, and token holders may stake their tokens to receive non-financial incentives, which are distributed in QI tokens.