BENQI, Avalanche’s first & only unicorn, is a very intriguing company. With nearly $2 billion in total value locked, the DeFi protocol is getting noticed by many people. Algorithmic liquidity will play a crucial role in the future development of decentralized finance solutions and products.
What Is BENQI Exactly?
As a company founded by individuals involved in Ethereum and its DeFi ecosystem, BENQI’s team acknowledged the potential of blockchain and crypto assets early on. Although Ethereum’s blockchain has technical limitations leading to scaling concerns and high transaction fees, Avalanche provided a solution. The blockchain has a different consensus algorithm, warranting a closer look. For BENQI’s team, Avalanche could help offset some of the load from Ethereum and provide a better transaction experience for users.
Even though the Avalanche ecosystem is still in the very early stages, several DeFi protocols leverage its technology. As Ethereum congestion remains a pressing issue for many – as is the centralized nature of Binance Smart Chain – Avalanche can give BENQI a first-mover advantage. Bringing lending and borrowing services to this ecosystem combined with algorithmic liquidity market solutions puts a very different spotlight on this blockchain ecosystem.
It is worth noting that BENQI can bridge to other blockchains. While it is native to Avalanche, it connects to Ethereum through the AEB bridge. For those users on Ethereum struggling with high gas fees – a common problem these days due to the NFT craze – Avalanche will provide a cheaper and faster alternative money market. BENQI will also generate revenue from protocols collected from borrowers and the interest spread. Those funds will be deposited into the Treasury for future uses.
BENQI Milestones To Date
With a strong focus on launching Liquidity Mining incentives for broader participation and the top-notch relation with key Avalanche staff and communities, BENQI plans to keep hitting milestone after milestone. Several of those milestones have been reached already, including a fundraising round of $6 million with the help of notable VC funds. Strategic investors include Dragonfly Capital, GBV, Arrington XRP, Spartan, and others.
The service brought to the table by this liquidity market protocol has not gone by unnoticed. As its services cater to DeFi and DeFi-curious users alike, BENQI secured $1 billion in Total Value Locked within days after its launch. That number has now risen to nearly $2 billion as more users contribute liquidity to the platform to facilitate decentralized lending and borrowing. Avalanche is clearly a strong contender for DeFi liquidity due to its more efficient nature.
On the topic of seed and private funding, BENQI noted a 3x oversubscription on both rounds. The public sale for BENQI ended on April 29, 2021, and raised $6 million. Investors benefit from a 21.6x return on investment at the current price.
Who Are The Team Members?
The BENQI ventures consist of multiple individuals who share a common goal of decentralizing lending and borrowing in the most efficient way possible. Three of its members are co-founders of Rome Blockchain labs, Inc, an incubator and software development firm.
JD Gagnon is one of its co-founders, along with Hannu Kuusi and Alexander Szul. Kuusi has over two decades of ICT experience and has been a heavy crypto fan since the early days of Bitcoin. Szul manages the development of the BENQI liquidity market platform. With the help of crypto advocates Jason Tuang – a DeFi specialist with financial knowledge – and Hansen Niu – specialized in corporate strategy – the BENQI team started taking shape.
These five individuals were joined by DeFi enthusiast and former small enterprise owner Dexter Lee and blockchain operations management specialist Dan Mgbor. Together, they created the liquidity market protocol the world knows as BENQI. The team will continue to push the boundaries of what the protocol is capable of and the services it can provide.
There are many benefits to BENQI, both for the users and the team itself. Being the first major liquidity market on the Avalanche blockchain creates a competitive advantage. Moreover, this move highlights the demand for alternative solutions to Ethereum-based decentralized finance. Finally, lower and faster transactions are beneficial to all parties involved. BENQI has the tools to compete with popular DeFi platforms such as AAVE, Compound, and CREAM.
Moreover, the team is exploring options to bridge to other blockchains, including Binance Smart Chain. That will happen through asset rails that route from Avalanche’s C-Chain through BENQI to centralized exchanges and vice versa. Users can rely on the existing bridge or use BENQI to transfer assets to the Avalanche C-Chain. Having multiple options is a significant benefit to all DeFi enthusiasts.