BENQI (QI) operates as a liquidity market and advanced DeFi (decentralized finance) staking protocol. The network is one of the primary lending options within the Avalanche ecosystem. As such, it’s been a popular network since its launch. Notably, the platform secured a total of $9.93 million via four rounds of token sales. This funding has gone to improving the network’s performance and expanding its features.
What Problems Does BENQI (QI) Attempt to Fix?
BENQI (QI) offers solutions to a variety of problems that many people face today. The network helps to provide a more streamlined and accessible lending system to the public. The protocol enables users to borrow without the need to appease gatekeepers. Users simply need to meet the collateralization requirements for the loan and they can gain access to the funding they need to expand their business or trading strategy.
Faster Loans
DeFi lending protocols like BENQI improve the loan process through efficiency. These networks provide users with faster access to funding. Getting a loan from a centralized service like your bank can be a time-consuming process that requires a plethora of steps in addition to meeting the collateralization requirements. Even after meeting these demands, it can take weeks for a loan to issue from a bank.
Lack of Transparency
The centralized banks have completely cut the average person out of the lending process. There is little way for you to easily obtain exact details on your bank’s lending profits, history, etc. BENQI provides another level of transparency through the use of blockchain technology. The use of a free blockchain explorer can provide all the information needed in near real-time to anyone on the network.
High Fees
Lending services have continually raised their rates over the last decade. Today’s loans come with a plethora of fees that are confusing and expensive. These fees have deterred many businesses and individuals from seeking funding. BENQI’s decentralized structure eliminates much of these fees from the equation because it removes the middlemen. Users conduct loans directly with the profits going back to the community.
Benefits of BENQI (QI)
BENQI introduces a variety of benefits to users. The network operates as a fully decentralized network which improves the overall security and transparency of the protocol. Additionally, the network was designed to improve user onboarding via a simplistic interface that provides access to yield-generating products.
Non-Custodial
Another major advantage of BENQI is its non-custodial nature. Non-custodial DeFi systems are the safest way to prevent hackers from accessing your funds. These networks don’t require you to send your crypto to a large centralized wallet where it becomes a target. Instead, your funds stay safe in your wallet until the moment your transactions execute.
Passive Income
The main draw to BENQI is its passive income streams. Passive income is a critical component in obtaining financial freedom. BENQI offers users multiple ways to earn interest without risking the loss of their original assets. Additionally, the network pays out rewards in QI, the native utility token that can be staked or lent to secure more profits.
Expandable
Another advantage of BENQI is its expandability. The network’s developers encourage the community to build strategies on the back of its lending functions. The protocol features an open-source code to help make development easier. This approach improves the usability of the protocol. As the more Dapps that leverage the system, the larger the network becomes, the more liquidity it provides, and the more returns users earn.
How Does BENQI (Qi) Work
BENQI leverages an advanced algorithmic liquidity market protocol to provide fast lending services to users. The network leverages the fourth-generation Avalanche blockchain. Avalanche has high transactions throughput due to its multi-blockchain structure. Avalanche separates the validation process from smart contract actions to provide top-notch scalability.
P2P Lending Market
BENQI’s main product is its P2P lending protocols. These systems make it easy to borrow and lend tokens in a secure manner. The system integrates a variety of steps to ensure that lenders don’t take losses. For one, the borrower must over-collateralize their loan using supported assets.
Safety Module
There is also a special staking pool called the Safety Module that is meant to offset any lending shortfalls. Users can stake Qi in a Safety Module and get a portion of protocol reserves as rewards. These added safety precautions protect users and improves confidence in the network.
Staking
There are a variety of ways to stake Qi tokens. The most popular option is to stake in liquidity pools on DEXs like Pangolin or in the Qi token pool directly using the BENQI protocol. Staking is one of the most popular features available today. Users provide liquidity to a smart contract for a preset time to secure returns. Staking is ideal for new traders because there are no surprises. You already know what your rewards will be and when they will be sent.
Token
Qi is the utility token for the BENQI ecosystem. Qi is required to participate in the lending and staking features of the network. You can use this token to send value as well. It is also a vital component of the community governance system.
Governance
BENQI relies on a DAO (Decentralized Autonomous Organization) to keep its community cohesive. These systems replace managers with voting mechanisms that the community uses to decide on vital changes and upgrades to the platform. These upgrades can include fee changes, new features, token burns, and more.
Bottom Line
BENQI is another example of how DeFi lending protocols are becoming more popular around the globe. These systems provide more convenience and profits to the market. This network provides the most popular DeFi features with scalability to empower users to secure returns. As such, BENQI is a protocol to watch in 2022.
