BENQI, Avalanche’s first and only unicorn, is a very interesting company. With a total value of nearly $ 2 billion, the DeFi protocol is perceived by many people. Algorithmic liquidity will play a crucial role in the future development of decentralized financial solutions and products.
What is BENQI exactly?
As a company founded by people involved in Ethereum and its DeFi ecosystem, the BENQI team recognized the potential of blockchain and crypto assets early on. Although Ethereum’s blockchain has technical limitations that lead to scaling issues and high transaction fees, Avalanche has provided a solution. The blockchain has a different consensus algorithm that warrants a closer look. For the BENQI team, Avalanche could help offset some of the load from Ethereum and provide a better transaction experience for users.
Although the Avalanche ecosystem is still in its very early stages, several DeFi protocols make use of its technology. With Ethereum congestion remaining an urgent problem for many – as does the centralized nature of the Binance Smart Chain – Avalanche can provide BENQI with a first-mover advantage. Bringing credit and credit services into this ecosystem in combination with algorithmic liquidity market solutions puts this blockchain ecosystem in a completely different light.
It’s worth noting that BENQI can bridge to other blockchains. Although native to Avalanche, it connects to Ethereum via the AEB bridge. For those Ethereum users who are struggling with high gas fees – a common problem these days due to the NFT craze – Avalanche will provide a cheaper, faster alternative money market. BENQI will also generate income from the logs collected from borrowers and the interest rate spread. These monies are deposited into the treasury for future use.
Previous BENQI milestones
With a strong focus on introducing liquidity mining incentives for broader participation and a world-class relationship with key Avalanche employees and communities, BENQI plans to reach milestone by milestone. Several of these milestones have already been reached, including a $ 6 million fundraising round with the help of well-known VC funds. Strategic investors include Dragonfly Capital, GBV, Arrington XRP, Spartan and others.
The service that this liquidity market protocol brings to the table has not gone unnoticed. Since its services cater to both DeFi and DeFi curious users, BENQI secured a Total Value Locked of $ 1 billion within days of its launch. That number has now climbed to nearly $ 2 billion as more users bring liquidity to the platform to make it easier for it to be decentralized and borrowed. Avalanche is clearly a strong contender for DeFi liquidity because of its more efficient nature.
When it comes to seed and private funding, BENQI found a 3-fold oversubscription in both rounds. BENQI’s public sale ended on April 29, 2021 and raised $ 6 million. Investors benefit from a return on investment of 21.6 times the current price.
Who are the team members?
The BENQI ventures are made up of several people who share the 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 company.
JD Gagnon is one of the co-founders alongside Hannu Kuusi and Alexander Szul. Kuusi has more than two decades of ICT experience and has been a huge crypto fan since the beginning of Bitcoin. Szul leads 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 – specialist in corporate strategy – the BENQI team took shape.
These five people were joined by DeFi enthusiast and former small business owner Dexter Lee and blockchain operations management specialist Dan Mgbor. Together they created the liquidity market protocol known to the world as BENQI. The team will continue to push the boundaries of what the protocol can do and the services it can provide.
BENQI offers many benefits, both for the users and for the team itself. Being the first major liquidity market on the Avalanche blockchain creates a competitive advantage. In addition, this step underlines the demand for alternative solutions for decentralized financing based on Ethereum. After all, lower and faster transactions are beneficial for everyone involved. BENQI has the tools to compete with popular DeFi platforms such as AAVE, Compound and CREAM.
In addition, the team is reviewing options for bridging other blockchains, including Binance Smart Chain. This is done via asset rails that lead from Avalanches C-Chain via BENQI to centralized exchanges and vice versa. Users can fall back on the existing bridge or use BENQI to transfer assets to the Avalanche C-Chain. Having multiple options is a major benefit for any DeFi enthusiast.
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