Liquidity market protocol BENQI has reached $1 billion in total value locked, or TVL, less than a week after launching on the Avalanche (AVAX) network, a major milestone that highlights the explosive growth of decentralized finance (DeFi) lending services.
Benqi Finance announced the milestone on Twitter late Sunday, where it thanked its community for the overwhelming support.
Thank you everyone for the overwhelming support. @avalancheavax #AvalancheRush #Avalanche $QI pic.twitter.com/36zRSrvHSs
— BENQI (@BenqiFinance) August 23, 2021
The protocol generated $200 million in TVL in the first 24 hours and $500 million in the first two days, as per the update from Aug. 21.
In DeFi, total value locked refers to the assets that are currently being staked on a specific protocol. The figure doesn’t represent outstanding loans, but the total supply that is being secured by a specific application.
Industry-wide TVL data shows a massive upsurge in DeFi activity. At the time of writing, nearly $160 billion in TVL was reported across the DeFi ecosystem. Aave is the biggest market player, representing 8.82% of TVL. Interestingly, Aave reached the $1 billion TVL milestone many months after it first launched.
Related: Aave price hits two-month high on Wall Street’s DeFi adoption hopes
The Avalanche smart contract platform has seen a swarm of activity recently, with Pangolin — another DeFi protocol focused on decentralized exchange services — reaching over $320 million in TVL.
Avalanche is doing its part to attract more developers to its platform, having only recently announced a $180 million liquidity mining incentive program. The program, dubbed Avalanche Rush, encourages more applications and tokens to migrate over to the Avalanche platform.
When asked about what makes Avalanche such an attractive platform for developers, BENQI co-founder J.D. Gagnon told Cointelegraph it has a lot to do with the optimized experience, both for users and builders:
“Firstly, Avalanche, the C-chain (the smart contract chain) in particular, is a wonderful ecosystem to experience, both as a user and as a builder. The fast finality, low fees and security guarantees makes it 10x better than many other networks. Many users have been excluded from participating in the DeFi boom on Ethereum due to high transaction costs, an issue that is largely resolved on Avalanche.”
Related: Avalanche Rush to give out more than 180M in DeFi incentives
Regarding the growth of DeFi, Gagnon said the recent growth of Binance Smart Chain and Polygon “have shown there is a significant appetite for cheap, efficient and secure networks for economic activity.” He expects Avalanche to be a significant source of that growth in the future.