Avalanche-Based Liquidity Market BENQI Hits $1 Billion in TVL Days After Launch


BENQI, an algorithmic liquidity market protocol, managed $1 billion in assets only a few days after its launch. This achievement came after the platform launched on the 19th of August. The assets were drawn to its decentralized platform in the wake of the collaboration between BENQI and the Avalanche Foundation on running a joint liquidity mining program.

The BENQI protocol is designed to help Avalanche ($AVAX) users earn interest on their assets, collect QI governance tokens as compensation for providing liquidity on the protocol, and receive credit via over-collateralized loans.

It came into existence on the Avalanche C-Chain as part of Avalanche’s decentralized finance (DeFi) ecosystem. Its ultimate goal is to provide a stable bridge between the world of DeFi and the networks run by institutions.

Avalanche itself was designed as an open-source platform for launching decentralized applications (dApps) and enterprise blockchain implementations, all as parts of an ecosystem that focuses on scalability and interoperability.

AVAX, the native token of Avalanche, is now skyrocketing in value, in a move that coincides with the announcement of BQNI’s liquidity mining program.

ACAXUSD Chart via TradingView

Three million units of this hard-capped and scarce asset will be allocated as liquidity incentives for BENQI users, with new incentive programs soon to follow. AVAX is to be offered as a reward to people who are lending and borrowing AVAX, ETH, LINK, wBTC, USDT, and DAI on the protocol with BENQI.

The Avalanche-based lending protocol managed to reach $1 billion total value locked in several days, while it took prominent DeFi protocol Aave months to hit the same milestone. Granted, the DeFi space is now much more developed with well over $80 billion of assets locked in it..

Other dApps are expecting to see their launch on Avalanche with the help of the Avalanche Bridge that provides a secure environment for fast and cheap asset transfers between this platform and Ethereum networks.

As reported Matthew Roszak, a veteran cryptocurrency investor and co-founder of decentralized finance (DeFi) platform Vesper, has revealed he believes the DeFi industry could hit $800 billion next year as its exponential growth trend continues.

Roszak said he believes a “perfect storm” is underway for the industry, as mainstream cryptocurrency adoption is growing while investors throughout the world have been chasing higher yields, which are available on DeFi platforms. To

Roszak, a lot of the expansion seen in DeFi is due to investors chasing higher yields on platforms that offer incentives to liquidity providers, such as the distribution of their own native token. These tokens inflate yields and attract users, but the investor sees the practice “normalize” as the sector keeps growing.

DISCLAIMER

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

IMAGE CREDIT

Featured image via Pixabay



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