How is BENQI (QI) coin generated?

BENQI's native token, QI, is generated primarily through minting during the protocol's bootstrap phase and ongoing interest payments on borrowed assets.

Dec 21, 2024 at 06:25 am

Key Points

• BENQI (QI) is the native token of the BENQI protocol, a decentralized non-custodial liquidity market and algorithmic stablecoin platform built on the Avalanche blockchain.
• QI serves multiple functions within the BENQI ecosystem, including governance, staking rewards, and as collateral for borrowing.
• QI is generated through various mechanisms, primarily through minting during the protocol's bootstrap phase and ongoing interest payments on borrowed assets.

Detailed Explanation

1. Minting During Bootstrap Phase

• During the BENQI protocol's inception, a limited supply of QI tokens was minted and distributed to early contributors and investors.
• This initial distribution provided a foundation for the QI token ecosystem and established its initial value.
• The minting process during the bootstrap phase was carefully designed to ensure a fair and transparent distribution of QI tokens.

2. Interest Payments on Borrowed Assets

• When users borrow assets on the BENQI protocol, they pay interest on the borrowed amount.
• A portion of this interest is used to mint QI tokens, which are then distributed to QI holders as staking rewards.
• The interest rate charged on borrowed assets is determined by the supply and demand of the asset within the protocol.

3. Staking Rewards

• Users can stake their QI tokens on the BENQI protocol to earn rewards.
• Staking QI tokens helps secure the network and contributes to the overall health of the protocol.
• The amount of QI rewards earned is based on the amount of QI staked and the holding period.

4. Liquidity Provision

• Users can provide liquidity to the BENQI protocol by depositing supported assets into the liquidity pools.
• In return for providing liquidity, users earn trading fees and QI rewards.
• The QI rewards are generated from a portion of the trading fees collected by the protocol.

5. Governance

• QI holders have the right to participate in the governance of the BENQI protocol.
• QI tokens are used for voting on protocol upgrades, parameter adjustments, and other governance proposals.
• The voting power of each QI holder is proportional to the number of QI tokens held.

FAQs

Q: What is the total supply of QI tokens?
A: The total supply of QI tokens is 10,000,000,000.

Q: What is the current price of QI tokens?
A: The current price of QI tokens can be found on cryptocurrency exchanges or tracking websites.

Q: How can I buy QI tokens?
A: QI tokens can be purchased on cryptocurrency exchanges that support the trading of Avalanche-based tokens.

Q: Where can I store QI tokens?
A: QI tokens can be stored in supported cryptocurrency hardware wallets or non-custodial software wallets that support Avalanche-based tokens.

Q: What is the purpose of QI tokens?
A: QI tokens serve multiple functions within the BENQI ecosystem, including governance, staking rewards, collateral for borrowing, and liquidity provision.