Rome Blockchain Labs, the organization behind BENQI’s Liquid Staking protocol on Avalanche, recently announced a collaboration with Alluvial and the founders of BENQI “to build a compliant, enterprise-grade Avalanche (AVAX) liquid staking product.”
This collaboration “offers institutions a secure AVAX staking option while participating in the consensus mechanism of the Avalanche platform and enabling more flexibility and liquidity for institutional network participants.”
Many liquid staking protocols currently available “do not meet the needs of enterprises.”
Alluvial’s staking standard “addresses the need for KYC/AML requirements for institutions, Web3 native enterprises, and other regulated entities to remain in compliance with regulatory obligations.”
With early support from companies such as Coinbase Cloud and Figment, the liquid staking product will be “governed in a decentralized manner with a broad and dispersed community of industry participants.”
Alluvial’s liquid staking standard “includes support for Ethereum (ETH), Polkadot (DOT), and now, Avalanche (AVAX).”
According to Messari, Avalanche (AVAX) “showed signs of capturing market share versus top EVM-compatible chains across several key metrics over Q1.”
As of July 13, there is $2.67B total value “locked on Avalanche.” Thanks largely to two breakthroughs — Avalanche Consensus and Subnets — Avalanche “has the speed, security, reliability, and scalability to power institutional web3 projects in fields including finance, insurance, payments, vehicles, entertainment, culture, and many more.”
Notable institutions already participating in the Avalanche ecosystem “include Deloitte, Lemonade, Togg and other institutional DeFi players.”
JD Gagnon, Co-founder of Rome Blockchain Labs / BENQI, said:
“It’s exciting to be working with Alluvial to bring a truly DeFi-native feature to institutional clients. What was previously only accessible to the retail market will now be available to enterprises and institutions, providing them with a multitude of liquid staking options including Avalanche (AVAX).”
As DeFi founders on Avalanche, the Rome Blockchain Labs / BENQI team “have extensive knowledge and experience in building and navigating within the space.”
Notable dApps launched by the team on Avalanche “include BENQI’s Liquidity Market – the second largest lending and borrowing protocol – and BENQI Liquid Staking.” Additionally, BENQI’s Liquid Staking asset (sAVAX) is “deeply integrated across many major dApps on Avalanche including AAVE, Ribbon, Trader Joe, Platypus and Yeti.”
Together with Alluvial and other industry participants, the Rome Blockchain Labs / BENQI team is “shaping a liquid staking protocol to serve the needs of institutions in a compliant, permissioned environment to address KYC/AML and other compliance requirements, all in a non-custodial product.”
Matt Leisinger, CEO of Alluvial, added:
“We’re thrilled to work with Rome Blockchain Labs (RBL) and the BENQI founders to add support for Avalanche to the multi-chain liquid staking standard. RBL and BENQI’s deep experience with Avalanche, liquid staking and DeFi makes them a perfect fit for a collaboration with Alluvial. I’m looking forward to being part of the Avalanche community to enable a decentralized and secure foundation for the next generation of the internet.”
What is Avalanche (AVAX) Liquid Staking?
Avalanche is “a Proof-of-Stake (PoS) protocol with a Primary Network of 3 blockchains: the Exchange Chain (X-Chain), Platform Chain (P-Chain) and the Contract Chain (C-Chain).”
The P-Chain is “the metadata blockchain on Avalanche and coordinates validators within the Avalanche platform.” Avalanche staking is “done on this chain, where validators accrue network rewards in exchange for securing the Avalanche network.”
Validators secure the network “by staking their AVAX asset for a minimum of 2 weeks.” While rewards accrue to the validators’ staked AVAX, the P-Chain “locks the AVAX for a predetermined period.”
The C-Chain “supports the creation and execution of smart contracts that enable Decentralized Finance (DeFi) on Avalanche.”
Most of Avalanche’s DeFi activity today, “including asset tokenizing, swaps, and the use of other DeFi products, is done on this chain.”
The X-Chain is “the Exchange Chain on Avalanche.” It acts as “a decentralized platform for creating and trading digital smart assets, with a set of rules that govern behavior.”
Avalanche Liquid Staking provides “a user-friendly solution to AVAX holders looking to participate in the consensus mechanism of Avalanche by staking AVAX.”
In return for staking AVAX, users will “receive a receipt token that represents each user’s ownership of the staked AVAX on the P-Chain.”
Users will be able “to freely utilize the receipt token within DeFi on the C-Chain while the staked AVAX will continue to accrue rewards in exchange for securing the Avalanche network.”
Additionally, users will “not need to go through the tedious process of cross-chain transfers between the C-Chain and P-Chain to stake their AVAX.”
Users can stake or unstake AVAX at any time, “subject to the 2-week staking minimum as described above.”
To unstake, there is “a 15-day unstaking period and 2 day claiming window after the unstaking period.” During the 2-day claiming window, users will “be able to claim native AVAX.”