How much is the circulation of BENQI(QI) currency?

The circulating supply of BENQI (QI) is approximately 139.33 million tokens as of March 3, 2023, according to CoinGecko, and it can be influenced by factors such as token issuance, burns, demand, and liquidity events.

Dec 19, 2024 at 11:42 pm

Key Points:

• Understanding BENQI (QI) Currency Circulation
• Factors Influencing QI Circulation
• Impact of QI Circulation on Token Value

How much is the circulation of BENQI (QI) currency?

BENQI (QI) is the native token of the BENQI decentralized lending and borrowing protocol on the Avalanche blockchain. As of March 3, 2023, BENQI has a circulating supply of approximately 139.33 million QI tokens, according to CoinGecko.

Factors Influencing QI Circulation

The circulating supply of QI tokens is dynamic and can be influenced by several factors:

• Issuance of New Tokens: New QI tokens are issued as rewards to liquidity providers and borrowers on the BENQI platform. The rate of issuance is determined by the protocol's rules and can be adjusted through governance votes.
• Token Burns: BENQI burns a portion of the QI tokens collected as fees to gradually reduce the total supply. This reduces the inflationary pressure on QI tokens.
• Demand for QI Tokens: The demand for QI tokens is driven by its utility on the BENQI platform. Users can stake QI tokens to earn rewards, vote on governance proposals, and pay transaction fees. Higher demand can lead to an increase in the circulating supply as users purchase QI tokens for these purposes.
• Liquidity Events: Large-scale liquidity events, such as exchange listings or token sales, can impact the circulating supply by releasing a significant number of QI tokens into the market. This can temporarily increase the circulating supply and affect the token's price.

Impact of QI Circulation on Token Value

The circulating supply of QI tokens has a significant impact on its token value:

• Lower Circulating Supply: A lower circulating supply can increase the scarcity of QI tokens, leading to potential price appreciation as demand remains constant or increases.
• Higher Circulating Supply: A higher circulating supply can increase the token's supply and potentially lead to price depreciation, especially if demand remains stagnant or decreases.

FAQs

• What factors can influence the circulation supply of QI?

  • Issuance of new tokens, token burns, demand, and liquidity events.

• How is the issuance rate of new QI tokens determined?

  • By the protocol's rules and governance votes.

• What is the purpose of burning QI tokens?

  • To reduce the total supply and create deflationary pressure on the token.

• How does token demand impact QI's circulation?

  • Increased demand can increase the number of tokens in circulation as users purchase them for staking, voting, and transaction fees.

• Can large liquidity events affect the circulating supply of QI?

  • Yes, exchange listings and token sales can release a significant number of QI tokens into the market, temporarily increasing the circulating supply.