BENQI Liquid Staked AVAX is a decentralized finance (DeFi) protocol operating on the Avalanche blockchain, designed to address the illiquidity of staked Avalanche (AVAX) tokens. It allows users to stake their AVAX and receive sAVAX, a liquid staking derivative that can be freely utilized across various DeFi applications while still accruing staking rewards.

Overview

The Avalanche network, as a Proof-of-Stake (PoS) blockchain, requires users to stake their AVAX tokens to participate in network validation and earn rewards. However, traditional staking on Avalanche's Platform Chain (P-Chain) locks these tokens, rendering them inaccessible for other financial activities within the DeFi ecosystem. BENQI Liquid Staking (BLS) was developed to solve this issue by tokenizing staked AVAX into sAVAX. This mechanism enables users to maintain exposure to AVAX staking rewards while simultaneously unlocking the liquidity of their assets, allowing them to be deployed in other DeFi protocols such as automated market makers (AMMs), lending platforms, and yield aggregators. As of July 2025, BENQI Liquid Staked AVAX holds a Total Value Locked (TVL) of approximately $351.91 million, all of which is on the Avalanche blockchain. ^{[1] [2]}

Technology and Functionality

BENQI Liquid Staking operates by allowing users to deposit their AVAX tokens into the protocol. In return, they receive sAVAX tokens, which represent their staked AVAX position and automatically accrue staking rewards over time. The value of sAVAX is designed to increase relative to AVAX as staking rewards are accumulated. The price of sAVAX is determined by the ratio of total AVAX staked to total sAVAX minted, multiplied by the current AVAX price.

A key feature of BENQI Liquid Staking is its cross-chain staking capability. While Avalanche staking typically occurs on the P-Chain, BENQI simplifies the process by allowing users to stake AVAX directly from the C-Chain (Contract Chain). The protocol then securely and automatically bridges these assets to the P-Chain for staking using Multi-Party Computation (MPC) encryption. This eliminates the need for users to manually bridge their tokens, streamlining the staking experience.

The protocol offers several benefits to users:

• DeFi Integrations: sAVAX is integrated into various DeFi protocols, enabling users to earn both native staking rewards and additional yields from other DeFi activities. For instance, sAVAX can be lent out on lending protocols, supplied to liquidity pools (e.g., sAVAX/AVAX), or used in other derivative products.
• No Lock-Up Periods and Zero Fees: Unlike traditional staking which often involves fixed lock-up periods, BENQI Liquid Staking allows users to unstake their AVAX at any time. The protocol does not charge fees for staking, depositing, or withdrawing AVAX.
• Unstaking Process: While there are no lock-up periods, unstaking AVAX through the protocol involves a 15-day unlock period. During this period, the sAVAX continues to accrue rewards. Rewards cease accruing only during the final 2-day redemption period after the unstake request has been processed. For users seeking immediate liquidity, secondary markets provide instant swaps between sAVAX and AVAX based on prevailing market rates.

The BENQI Liquid Staking protocol has undergone audits to ensure its security and reliability. ^{[1] [3] [9]}