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BENQI Liquid Staked AVAX (sAVAX) is a tokenized version of staked AVAX on the Avalanche network. It allows users to earn staking rewards while maintaining liquidity and utilizing their assets within Decentralized Finance (DeFi) protocols. sAVAX is minted when users stake AVAX through BENQI Liquid Staking and can be exchanged back for AVAX plus accrued rewards at any time, pending a 15-day unlock period.
BENQI Liquid Staked AVAX (sAVAX) is a tokenized version of staked AVAX on the Avalanche network. It allows users to earn passive income through staking while maintaining liquidity and utilizing the asset within Decentralized Finance (DeFi) protocols. Here's how sAVAX is used:
Staking and Liquidity:
- Users stake their AVAX through BENQI Liquid Staking, receiving sAVAX tokens in return.
- sAVAX can be traded, lent, or used in DeFi applications, providing liquidity and capital efficiency.
DeFi Integration:
- sAVAX can be integrated into various DeFi protocols, such as automated market makers (AMMs), lending and borrowing platforms, and yield aggregators.
Redemption:
- Users can redeem their sAVAX for AVAX plus accrued rewards after a 15-day unlock period.
Market Performance:
- sAVAX is highly correlated to the overall market and can trade at a discount to AVAX due to lower liquidity and technical risks associated with the Benqi smart contract.
Staking Rewards:
- The current reward rate for BENQI Liquid Staked AVAX is 5.55%, allowing users to earn passive income through staking.
Overall, sAVAX provides a flexible and liquid way to stake AVAX, enabling users to participate in DeFi activities while earning staking rewards.
To store BENQI Liquid Staked AVAX (sAVAX) tokens, you can use an EVM-compatible wallet. Here are the steps to follow:
Download a Trust Wallet:
- If you are using a desktop computer, download Google Chrome and the Trust Wallet Chrome extension.
- If you prefer using your mobile phone, download the Trust Wallet app via Google Play or the iOS App Store.
Set up your Trust Wallet:
- Register and set up the crypto wallet via the wallet’s Google Chrome extension or via the mobile app.
- Make sure to keep your seed phrase safe and take note of your wallet address.
Buy AVAX:
- Login to your Binance account and proceed to the Binance Crypto webpage to buy the AVAX.
- If you are not an existing user, refer to the guide on registering and buying your first cryptocurrency on Binance.
Transfer AVAX to Your Wallet:
- Go to your Binance wallet section and look for the AVAX you purchased.
- Click on withdraw and fill up the required information.
- Set the network to Avalanche, provide your wallet address, and the amount you want to transfer.
- Click the withdraw button and wait for your AVAX to appear in your Trust Wallet.
Swap AVAX for sAVAX:
- Choose a decentralized exchange (DEX) that supports the Avalanche blockchain.
- Connect your Trust Wallet to the DEX.
- Select your AVAX as the payment and select the BENQI Liquid Staked AVAX as the coin you want to acquire.
- Apply the swap.
Store sAVAX in Your Wallet:
- Once the swap is complete, your sAVAX tokens will be stored in your Trust Wallet.
Remember to keep your seed phrase safe and secure to protect your sAVAX tokens.
To buy BENQI Liquid Staked AVAX (sAVAX) tokens, follow these steps:
Choose a Decentralized Exchange (DEX): Select a reliable DEX that supports the Avalanche blockchain, such as 1inch.
Set Up a Crypto Wallet: Download and install a Web3 crypto wallet like Metamask or an App wallet like Trust Wallet. Ensure the wallet is compatible with the chosen DEX.
Create and Set Up the Wallet: Follow the wallet's setup instructions, taking note of your wallet address and keeping your seed phrase secure.
Buy AVAX: Purchase AVAX, the base currency for the Avalanche blockchain, on a centralized exchange like Binance. Transfer the AVAX to your self-custody wallet.
Connect the Wallet to the DEX: Go to the DEX, click "Connect Wallet," and follow the instructions to link your wallet.
Find and Trade sAVAX: On the DEX, find the "Swap" option and select AVAX as the "From" currency and BENQI Liquid Staked AVAX (sAVAX) as the "To" currency. If sAVAX is not listed, input its contract address.
Confirm the Swap: Enter the desired amount, review the details, and click the "Swap" button. Your wallet will ask for confirmation.
Monitor Your Transaction: Check the transaction details on the block explorer.
Remember to be cautious of scams and ensure you have the official contract address for sAVAX.
BENQI Liquid Staked AVAX (sAVAX) is a tokenized version of staked AVAX on the BENQI Liquid Staking protocol. This protocol allows users to stake their AVAX tokens and receive sAVAX in return, which can be used within Decentralized Finance (DeFi) protocols while earning passive returns for securing the Avalanche network.
The BENQI Liquid Staking protocol was built on Avalanche, providing a seamless solution for users to stake AVAX without the need for cross-chain transfers to the Avalanche P-Chain. This liquid staking solution frees up locked capital, enabling greater capital efficiency within the Avalanche network.
The sAVAX token accrues interest through Avalanche staking rewards and can be exchanged for AVAX plus staking rewards through the "Unstake" tab in the BENQI Liquid Staking app. The price of sAVAX increases relative to the total AVAX staked, including accrued rewards, in the pool.
Historical data for sAVAX is available, showing its price performance over time. The all-time high for sAVAX was $103.24 on April 2, 2022, and its all-time low was $9.54 on September 25, 2023.
BENQI Liquid Staked AVAX (sAVAX) is a tokenized representation of staked AVAX tokens on the Avalanche network. Here's how it works:
Staking and TokenizationWhen users stake their AVAX tokens on the BENQI Liquid Staking platform, they receive sAVAX tokens in return. These sAVAX tokens are yield-bearing assets that earn rewards from Avalanche validator rewards. This process tokenizes the staked AVAX, allowing users to freely use it within decentralized finance (DeFi) applications while still earning passive returns for securing the Avalanche network.
Benefits of sAVAXsAVAX tokens offer several benefits compared to traditional staking:
- Transferability: sAVAX tokens are transferable and can be used within DeFi protocols such as automated market makers (AMMs), lending and borrowing platforms, and yield aggregators.
- No Lock-up Periods: Unlike traditional staking, there are no lock-up periods for staking AVAX on BENQI Liquid Staking. Users can withdraw their AVAX at any time, although there is a 15-day unlock period.
- Zero Fees: There are currently no fees for staking and unstaking AVAX on BENQI Liquid Staking.
- Full Control: Users have full control over their assets and associated accounts.
sAVAX tokens can be used in various DeFi applications, including lending and borrowing platforms, yield aggregators, and automated market makers. This allows users to earn additional rewards on their staked AVAX while still supporting the Avalanche network. Some popular DeFi platforms where sAVAX can be used include Benqi Liquidity Market, AAVE, Trader Joe, Balancer, and Ribbon Finance.
Unstaking and RedemptionWhen users want to unstake their AVAX, they can do so through the BENQI Liquid Staking app. There is a 15-day unlock period, during which rewards continue to accrue. After the unlock period, users can redeem their sAVAX for AVAX plus accrued rewards. Alternatively, users can instantly swap sAVAX for AVAX through secondary markets, such as automated market makers, although this may incur exchange fees.
Protocol RevenueThe BENQI protocol earns revenue by taking a 10% share of the rewards generated by the validators, which includes the delegator fee paid to the underlying validators.
OverallBENQI Liquid Staked AVAX (sAVAX) provides a flexible and efficient way for users to stake their AVAX tokens while maintaining liquidity and access to DeFi opportunities.
BENQI Liquid Staked AVAX (sAVAX) offers several strengths:
- No Lock-up Periods: Users can stake and unstake their AVAX without any lock-up periods, allowing for greater flexibility and control over their assets.
- Zero Fees: There are no fees for depositing and withdrawing from BENQI Liquid Staking, making it a cost-effective option.
- Full Control: Users maintain full control over their assets and associated accounts, ensuring they can manage their staked AVAX as needed.
- Seamless Staking: BENQI Liquid Staking eliminates the need for cross-chain transfers to the Avalanche P-Chain, simplifying the staking process.
- Additional Utility: sAVAX can be freely utilized within Decentralized Finance (DeFi) protocols, providing additional utility and earning opportunities.
- Passive Returns: Users can earn passive returns for securing the Avalanche network while still having access to their staked AVAX.
- Tradeability: sAVAX is a tradeable receipt of staked AVAX, allowing users to exchange it for AVAX plus staking rewards at any time.
- Fixed Supply: The supply of sAVAX is fixed, ensuring that each sAVAX is always redeemable for one AVAX.
- High Correlation to Market: sAVAX is highly correlated to the overall market, making it a useful asset for market tracking and investment strategies.
BENQI Liquid Staked AVAX (sAVAX) carries several risks, including:
Smart Contract Risks: sAVAX is exposed to the risks associated with the Benqi smart contract, which could result in the failure or vulnerability of the contract, leading to assets being locked or lost forever.
Liquidation Risks: Assets supplied or borrowed on the protocol could fluctuate in value due to systemic risks or market volatility, potentially leading to the liquidation or closing of a user's position.
Technical Risks: sAVAX has less liquidity and utility compared to AVAX, and it cannot be used to pay for gas fees. Additionally, it is exposed to technical risks associated with the Benqi smart contract, which could impact its value.
Market Correlation: sAVAX is highly correlated to the overall market, which means its value can be affected by broader market trends.
Risk of IL (Impermanent Loss): When paired with its underlying coin in a liquidity pool, sAVAX can incur impermanent loss, as seen in other liquid staking tokens like stMATIC.
General Risks of Staking: Staking AVAX through Benqi also carries general risks associated with staking, such as validator performance and network security.
These risks highlight the importance of careful consideration and risk assessment before participating in BENQI Liquid Staking and using sAVAX.
- JD Gagnon: Co-founder of Rome Blockchain Labs and BENQI, responsible for building and navigating the DeFi space on Avalanche.
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