What Is BENQI (QI) And How Does It Work? | KuCoin Crypto Gem Observer

2021/08/17 10:03:31

Borrowing crypto is an important service for both those just starting out and experienced traders looking to increase their potential. Meanwhile, lending allows users with crypto to earn a passive income on their otherwise stagnant holdings.

BENQI is entering this market with their Avalanche-powered platform. It looks to fix the issues DeFi currently faces on Ethereum with its algorithmic liquidity market protocol. With its world premiere KuCoin listing incoming, it’s well worth taking a look at BENQI.

What is BENQI?

BENQI is a non-custodial liquidity market protocol. It allows users to lend, borrow, and earn interest using their crypto. It aims to alleviate the issues facing the DeFi scene as we know it today, namely the high network fees and congestion.

It has created a platform to provide its Liquidity Market Protocol that is both highly scalable and decentralized. BENQI is ultimately helping to democratize access to decentralized finance products through the power of blockchain and the lending and borrowing of cryptocurrencies.

How does BENQI work?

The protocol works by enabling users to deposit their assets, which will then be added to a pool that can be borrowed by others. Users who provide liquidity to the protocol are able to earn a passive income, while those who borrow can do so in an over-collateralized manner.

The funds on BENQI are administered by smart contracts. Meanwhile, in the beginning, governance of BENQI will be led by the founding team of the project, but will eventually be delegated to a DAO run by the community using QI tokens.

Who created BENQI?

A team of seven members helped bring the BENQI project to life:

JD Gagnon ‌was a co-founder of Rome Blockchain Labs, Inc - an incubator and software development firm - as well as CSO of Etheralabs, Inc.

Hannu Kuusi previously co-founded Rome Blockchain Labs, Inc alongside JD, having more than 20 years experience in the ICT field. He has been involved with crypto since the early days of BTC.

Alexander Szul ‌was another of the co-founders of Rome Blockchain Labs, Inc, developing Velox, and managing the development of the BENQI liquidity market platform.

Dan Mgbor is experienced in operations management involving blockchain, holding a BEng in Electronic & Computer Engineering as well as a MSc in Business Analytics & Management Science.

Jason Tuang has been a crypto advocate since 2016, previously working at one of the big 4 accounting firms. He is a DeFi specialist , bringing his financial knowledge to the blockchain space.

Hansen Niu is another crypto advocate who specializes in corporate strategy. For education, he earned a BEng in Chemical & Process Engineering on top of an MBA .

Dexter Lee participated in early DeFi movements. He founded a small enterprise which was sold in 2020. He got a BEng in Civil Engineering.

What is the QI token?

QI is the native asset on Avalanche and is used primarily for voting on proposals for the protocol. There will be no token circulation prior to its listing on KuCoin.

The token distribution is as follows:

Liquidity Mining Program: 45%

Token Sale: 25%

Treasury: 15%

Team: 10%

Exchange Liquidity: 5%

What is the QI token used for?

The QI token is needed in order to vote on proposals for the BENQI protocol. These come in the form of BENQI Improvement Proposals (BIPs) which only holders of the token can ultimately vote on.

QI will also be needed to initiate proposals, meaning users who want to actively suggest a new development for the project will need to hold the tokens too.

Closing Thoughts

BENQI is looking to take a bite out of a lucrative market. DeFi and the possibilities it presents to users of all kinds anywhere in the world is still in its early stages. Mass adoption is not quite there yet, though platforms like this are helping pave the way there.

As it progresses towards being DAO led, the community will gain further control of the platform and shape it to their needs. With no tokens currently in circulation until the KuCoin listing on August 19th, now is a good time for users to get their hands on QI tokens and not only gain the ability to make proposals and vote on them, but also earn a passive income.