On August 19, 2021, a project named BENQI was first launched on the Avalanche platform. BENQI was founded by an incubator and software development firm named Rome Blockchain Labs Inc. In a matter of days, all eyes were on BENQI – let’s find out why.
What is BENQI?
BENQI is a non-custodial, liquidity market protocol. Let’s break that down. What does non-custodial mean? In cryptocurrency, a non-custodial service is one where users keep and protect funds in their own wallets, i.e. they don’t entrust the platform with taking care of their crypto.
Now, what is a liquidity protocol? If buyers and sellers disagree on the price of an asset, market makers resolve the issue by providing liquidity: they step in and trade the asset at the current price. So, you don’t have to wait for a buyer or seller to show up, you can trade anyway; this is what liquidity means in decentralized finance.
The BENQI platform is based on this concept of liquidity; it is centered around lending, borrowing and earning interest on crypto funds. Users pool their funds together and can borrow from the pool, they provide liquidity and earn passive income, and smart contracts execute all the transactions.
Most decentralized finance platforms are fraught with issues like congestion and rising fees. BENQI wants to change the game with an upper hand in speed, scalability, fees and compatibility with popular plugin wallets.
What is the QI token?
The QI token is a native asset on the BENQI network. As mentioned earlier, QI token holders make decisions concerning the platform; they get to vote on BENQI Improvement Proposals (BIPs) and they can also initiate proposals.
The tokens have a supply limit of a little more than 7 billion and currently, about 300 million tokens are in circulation. 45% of the QI token supply is allocated to the liquidity mining program which Avalanche and BENQI launched together, 25% of it goes to a token sale, 15% of the tokens are in the treasury, another 10% is reserved for the founding team and finally, 5% of the tokens are used for exchange liquidity.
BENQI price analysis
The QI token currently ranks #495 in the crypto market and BENQI is currently trading at $0.18. It reached one of its highest ever price points in the past day, where it was worth $0.19. Looking at its performance over the past 24 hours, it has fallen by 8.20%. However, in the past week, the price has gone up by 49.57%.
The price is predicted to rise to $0.21 by the end of this year and $0.31 by 2022; if it continues to increase at this rate, it could go up to $6.33 by 2030. Since the supply of tokens is fixed, scarcity of supply should eventually push the price up.
Technically analysing the price definitely helps to judge the value of an investment, but at the same time, you also need to look at the coin, its platform, engagement and performance.
BENQI started with a bang in August; its total value locked (TVL) exceeded $1 billion in the first five days. For those who are not familiar with TVL, it is the total value of all the deposited funds on the network. No wonder Aave, the decentralized finance market which supports BENQI, hit the billion-dollar milestone in about eight months after BENQI’s launch.
To conclude, we do have reason to be optimistic about the QI token as a valuable investment. But we must note that the cryptocurrency market is generally highly volatile and BENQI is subject to all the risks that come with investing in crypto, so, it is always best to ask yourself how much of a risk you are willing to take before making a decision to invest.