What is BENQI Liquid Staked AVAX (sAVAX)?

Deep Dive

1. Purpose & Value Proposition

sAVAX solves the liquidity problem in traditional staking by tokenizing staked AVAX. Users earn ~5.43% annual rewards for securing Avalanche while retaining flexibility to use sAVAX in DeFi strategies (BENQI). This dual utility addresses capital inefficiency, letting users compound yields through lending, liquidity provisioning, or collateralized borrowing without unstaking.

2. Technology & Workflow

Staking AVAX via BENQI triggers a 15-day cooldown before unstaking, followed by a 2-day redemption window. sAVAX’s value accrues automatically through validator rewards, with its peg to AVAX maintained via a redemption mechanism. The protocol delegates staked AVAX to validators based on community governance votes, enhancing decentralization.

3. Ecosystem Integration

sAVAX is integrated into Avalanche’s top DeFi platforms:
- Lending: Used as collateral for stablecoin minting (e.g., $AXD on Aesyx Fi) and borrowing at high LTV ratios (Silo Finance).
- Liquidity: Deployed in yield farms and liquidity pools while still earning staking rewards.
- Cross-chain: Supported by dappOS for multichain strategies and Visa-linked spending via the Avalanche Card (Visa).

Conclusion

sAVAX redefines staked asset utility by merging validator rewards with DeFi composability. Its structured unstaking process and deep ecosystem integrations position it as a cornerstone of Avalanche’s DeFi landscape. How might Avalanche’s scalability further amplify sAVAX’s role in cross-chain liquidity?