Meet The Company That is Avalanche’s First Unicorn at Nearly $2 Billion in TVL
02 September 2021 - 2:17PM
NEWSBTC
BENQI, Avalanche’s first & only unicorn, is a very intriguing
company. With nearly $2 billion in total value locked, the DeFi
protocol is getting noticed by many people. Algorithmic liquidity
will play a crucial role in the future development of decentralized
finance solutions and products. What Is BENQI Exactly? As a company
founded by individuals involved in Ethereum and its DeFi ecosystem,
BENQI’s team acknowledged the potential of blockchain and crypto
assets early on. Although Ethereum’s blockchain has technical
limitations leading to scaling concerns and high transaction fees,
Avalanche provided a solution. The blockchain has a different
consensus algorithm, warranting a closer look. For BENQI’s team,
Avalanche could help offset some of the load from Ethereum and
provide a better transaction experience for users. Even though the
Avalanche ecosystem is still in the very early stages, several DeFi
protocols leverage its technology. As Ethereum congestion remains a
pressing issue for many – as is the centralized nature of Binance
Smart Chain – Avalanche can give BENQI a first-mover advantage.
Bringing lending and borrowing services to this ecosystem combined
with algorithmic liquidity market solutions puts a very different
spotlight on this blockchain ecosystem. It is worth noting that
BENQI can bridge to other blockchains. While it is native to
Avalanche, it connects to Ethereum through the AEB bridge. For
those users on Ethereum struggling with high gas fees – a common
problem these days due to the NFT craze – Avalanche will provide a
cheaper and faster alternative money market. BENQI will also
generate revenue from protocols collected from borrowers and the
interest spread. Those funds will be deposited into the Treasury
for future uses. BENQI Milestones To Date With a strong focus on
launching Liquidity Mining incentives for broader participation and
the top-notch relation with key Avalanche staff and communities,
BENQI plans to keep hitting milestone after milestone. Several of
those milestones have been reached already, including a
fundraising round of $6 million with the help of notable VC funds.
Strategic investors include Dragonfly Capital, GBV, Arrington XRP,
Spartan, and others. The service brought to the table by this
liquidity market protocol has not gone by unnoticed. As its
services cater to DeFi and DeFi-curious users alike, BENQI secured
$1 billion in Total Value Locked within days after its launch. That
number has now risen to nearly $2 billion as more users contribute
liquidity to the platform to facilitate decentralized lending and
borrowing. Avalanche is clearly a strong contender for DeFi
liquidity due to its more efficient nature. On the topic of seed
and private funding, BENQI noted a 3x oversubscription on both
rounds. The public sale for BENQI ended on April 29, 2021, and
raised $6 million. Investors benefit from a 21.6x return on
investment at the current price. Who Are The Team Members? The
BENQI ventures consist of multiple individuals who share a 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 firm.
JD Gagnon is one of its co-founders, along with Hannu Kuusi and
Alexander Szul. Kuusi has over two decades of ICT experience and
has been a heavy crypto fan since the early days of Bitcoin. Szul
manages 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 –
specialized in corporate strategy – the BENQI team started taking
shape. These five individuals were joined by DeFi enthusiast and
former small enterprise owner Dexter Lee and blockchain operations
management specialist Dan Mgbor. Together, they created the
liquidity market protocol the world knows as BENQI. The team will
continue to push the boundaries of what the protocol is capable of
and the services it can provide. Conclusion There are many benefits
to BENQI, both for the users and the team itself. Being the first
major liquidity market on the Avalanche blockchain creates a
competitive advantage. Moreover, this move highlights the demand
for alternative solutions to Ethereum-based decentralized finance.
Finally, lower and faster transactions are beneficial to all
parties involved. BENQI has the tools to compete with popular DeFi
platforms such as AAVE, Compound, and CREAM. Moreover, the team is
exploring options to bridge to other blockchains, including Binance
Smart Chain. That will happen through asset rails that route from
Avalanche’s C-Chain through BENQI to centralized exchanges and vice
versa. Users can rely on the existing bridge or use BENQI to
transfer assets to the Avalanche C-Chain. Having multiple options
is a significant benefit to all DeFi enthusiasts. Image:
depositphotos/grandfailure
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