BENQI🔺 (@BenqiFinance): The 5 Minute Guide to Borrowing Against Your Crypto on Avalanche

The 5 Minute Guide to Borrowing Against Your Crypto on Avalanche What if you could buy more crypto without selling what you already hold? That's exactly what BENQI Markets lets you do. Deposit your crypto, borrow against it, and keep your original position while accessing fresh capital. No selling or missing out on upside. If you've ever used a traditional bank, the concept isn't that different. You deposit, earn interest, borrow when you need liquidity. The difference is you're in control, not the bank. Your assets work harder, and your options stay open. But let's face it: all those moving parts can feel overwhelming if you are new to DeFi(and sometimes, even if you're a vet). That's why we're breaking down exactly how BENQI Markets work. It doesn't matter if you're new to Avalanche or a seasoned DeFi user. No turbo blockchain jargon or knowledge assumptions here. Just the simplest path to understanding lending and borrowing on Avalanche. BENQI Markets is a lot like a bank. You can deposit crypto assets to earn interest and borrow against those deposits when you need extra buying power. Think of it like this; instead of selling your crypto to free up cash, you can often borrow against it. That way you keep your position while still accessing capital. Why do people do this? Let's say you're holding $AVAX and you want it to work harder for you. Instead of just holding it, you can convert it to $sAVAX (staked AVAX) through BENQI's liquid staking. $sAVAX earns staking rewards automatically while staying liquid. This means you can still use it. Now here's where it gets interesting. You can deposit that $sAVAX into BENQI Markets as collateral, then borrow $USDC against it. That $USDC hits your wallet as real, spendable money, while your $sAVAX stays deposited and keeps earning staking yield in the background. So, what can you actually do with that borrowed $USDC? Anything. That's the point. Put a down payment on a car without liquidating your crypto position Cover an unexpected expense like a medical bill, home repair, or opportunity that can't wait Fund a business purchase while keeping your $AVAX exposure intact Bridge a cash flow gap if you're self-employed and waiting on payments Buy the dip on another asset without selling what you already believe in The key difference from a traditional loan: no credit check, no bank approval, no waiting weeks. You are borrowing against assets you already own, on your timeline. Quick example: You hold $10,000 worth of $sAVAX. You deposit it into BENQI Core Markets and borrow $5,000 USDC. You use that $5,000 for a down payment on a used car. Meanwhile, your $sAVAX is still earning staking rewards. If $AVAX price goes up, your collateral is worth more. You can pay back the loan over time (or whenever you want) and once repaid, you withdraw your $sAVAX that has been quietly compounding the whole time. You got the car. You kept your $AVAX. Your stack kept growing. One important note though is that this cuts both ways. If your collateral drops too much in value, or you borrow too close to your limit, your position becomes riskier and you could face liquidation. That is why starting conservative matters. Ensure you borrow well under your max and keep that Health Factor healthy. 🏦How depositing works Borrowing on BENQI starts with depositing. Your deposit is what backs the loan. You choose an asset to supply, enter the amount, and confirm. After that, you begin earning interest on what you supplied. There’s also a toggle you’ll see called “Use as Collateral.” Turning this on means your deposited asset can be counted as backing for borrowing. If you leave it off, you can still earn interest, but it won’t increase your borrowing power. Before you confirm the deposit, BENQI shows you preview numbers like how your position changes after supplying. This is where you sanity-check whether what you’re doing keeps your account in a comfortable range. 🏦How borrowing works after you’ve deposited Once you’ve supplied collateral, you can switch to the Borrow section and select the asset you want to borrow. $USDC is the most intuitive for newcomers because it behaves like a dollar. You enter the amount you want to borrow and confirm. Once the transaction goes through, the borrowed funds appear in your wallet, and the loan starts accruing interest over time. So, for example, if you deposit $1,000 worth of AVAX, you might be able to borrow $500-600 in USDC depending on current rates. A beginner-friendly approach is to borrow well below the maximum available. You’re not trying to win a leverage contest on day one. You’re learning how the system behaves. Pace yourself. The simple loop: Deposit crypto to earn interest, optionally mark it as collateral, borrow against it to access liquidity without selling, then repay the loan to unlock and withdraw your collateral. You don't need to master every feature on day one. Start by depositing a small amount of an asset you already hold. Watch how the interest accrues Check your Health Factor Get comfortable with the interface Once that feels natural, you can explore borrowing, but only when you are ready, and only with amounts you are comfortable managing. That's the real power of BENQI, you move at your own pace, with full control, while your assets keep working for you. Ready to start? https://app.benqi.fi/