Is Benqi Safe?
Risk Grade: B- (28/100)
Benqi is rated as moderate risk — some novel mechanisms, generally well-understood.
Lower risk — well-established Avalanche native with a clean record, but sAVAX leverage loops create hidden liquidation cascades during AVAX drawdowns
The largest lending and liquid staking platform on the Avalanche blockchain, where you can earn interest on deposits or stake AVAX for the sAVAX token. It manages $300M in deposits with over 23 million AVAX staked. Its B grade reflects a mature Compound-fork design with no major exploits, offset by circular liquidation risks from using sAVAX as collateral in its own lending markets.
TVL
$142M
Mechanisms
6
Interactions
5
Value Grade
B-
Key Risks for Benqi Users
sAVAX can lose its peg to AVAX during a crash because unstaking takes 14 days. If you need to sell immediately, you take a discount, which triggers liquidations that push the price down further
People borrow AVAX against sAVAX, then stake it again for more sAVAX, creating leverage loops. When AVAX drops, these loops unwind all at once and the selling pressure cascades through every level
The top 25 holders control 96.4% of sAVAX. If a few large players decide to exit at the same time, the token's liquidity evaporates and retail holders are left with no buyers
Top Risk Factors
- •sAVAX liquid staking introduces de-peg risk where sAVAX trades at discount to AVAX during stress events
- •Heavy Avalanche ecosystem dependency means QI token value and TVL are tightly coupled to AVAX performance
- •sAVAX used as collateral in lending markets creates circular liquidation risk during AVAX drawdowns
Risk Score Breakdown
Benqi's highest risk area is Vitality Risk (6/10). Here's how each dimension contributes to the overall 28/100 score:
Read the Full Benqi Risk Report
This protocol has 2 collapse scenarios. 2 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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