Benqi
Benqi is a decentralized money market built on the Avalanche network for permissionless lending and borrowing.
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- Documentation
- Auditors
- Please see our FAQ on experienced auditors
- Website
- Token: QI
- Tags: Lending
- TVL: $448.4M (Rank #43)
- TVL Ranking by Lending: #12
- Blockchain: Avalanche
- Chain TVL
- Avalanche: $448.37M
- Code reviewed by at least one experienced auditor; Halborn audited in May 2021
- Public team promotes accountability
- No documented protocol hacks since launch
- Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
- Top 5% by total value locked reduces risk
- Multisig wallet controls protocol upgrades
- Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
- No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
- Low voting power concentration reduces risk
- No death spiral concerns
- Robust controls to mitigate oracle price manipulation
- Cross-collateral markets are exposed to systemic risks as each asset creates incremental risks for the platform as a whole
- Basic controls in place to prevent risky borrowing
- Basic mechanisms in place to incentivize liquidations
- Solid methods to accrue protocol reserves
- Benqi is the largest lending protocol on the Avalanche chain
How Benqi (lending) works
Benqi's lending protocol consists of a decentralized system of lending pools. Users deposit assets they want to lend into a liquidity pool and borrowers draw from the pool when they want to take out a loan. Benqi borrowers must first supply assets before they can borrow. Given the high volatility of crypto assets, borrowers must post more collateral than the value of the loan, or commonly referred to as overcollateralization. Interest rates on Benqi are driven by market supply and demand. To facilitate this activity, Benqi issues QiTokens to lenders that reflect accruing interest on the underlying token.
How Benqi (lending) makes money
Benqi's lending platform currently charges a reserve factor that allocates a share of borrowers' fees to the protocol. Each supported asset has a reserve factor that determines how much goes into the reserve.
How you make money on Benqi (lending)
You earn lending fees on Benqi by depositing their idle crypto assets to be used by borrowers looking for leverage. Benqi also offers ongoing protocol incentives in its native QI token to bootstrap demand.
