# ARC: Add support for sAVAX (BENQI Liquid Staking AVAX Token) on AAVE v3 **URL:** \ **Category:** New Asset\ **Created:** [April 20, 2022, 3:52pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892 "2022-04-20T15:52:03Z")\ **Posts on this page:** 15\ **Page:** 1
**Author:** ![Team\_BENQI](https://avatars.discourse-cdn.com/v4/letter/t/a587f6/32.png) [@Team\_BENQI](https://governance.aave.com/u/Team_BENQI)\ **Post date:** [April 20, 2022, 3:52pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/1 "2022-04-20T15:52:03Z")
**Topic** ARC: Add support for sAVAX (BENQI Liquid Staked AVAX) **References** - Project: [https://staking.benqi.fi/](https://staking.benqi.fi/) - Document portal: [https://docs.benqi.fi/](https://docs.benqi.fi/) - Ethereum addresses contracts: [Staked AVAX (sAVAX) Token Tracker | SnowTrace](https://snowtrace.io/token/0x2b2C81e08f1Af8835a78Bb2A90AE924ACE0eA4bE) - ChainLink Oracle: [0x2854Ca10a54800e15A2a25cFa52567166434Ff0a](https://snowtrace.io/address/0x2854Ca10a54800e15A2a25cFa52567166434Ff0a) - Audit: [https://162914606-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MViz\_ikDZy4OemUj\_VI%2Fuploads%2Fsjpc2u859ZnLjsedBuel%2FBenqi\_LiquidStaking\_Smart\_Contract\_Security\_Audit\_Report\_Halborn\_Final.pdf?alt=media&token=6b646d03-5123-42cd-b210-2238f8d0242b](https://162914606-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MViz_ikDZy4OemUj_VI%2Fuploads%2Fsjpc2u859ZnLjsedBuel%2FBenqi_LiquidStaking_Smart_Contract_Security_Audit_Report_Halborn_Final.pdf?alt=media&token=6b646d03-5123-42cd-b210-2238f8d0242b) - Formal Verification: [http://certora.com/wp-content/uploads/2022/04/benqiApril2022.md-Grip.pdf](http://certora.com/wp-content/uploads/2022/04/benqiApril2022.md-Grip.pdf) - Twitter: [https://twitter.com/BenqiFinance](https://twitter.com/BenqiFinance) - Telegram: [https://t.me/BENQIFinance](https://t.me/BENQIFinance) **Summary** The community would like to ask for your support in listing sAVAX as a collateral asset. sAVAX is the Liquid Staking token from BENQI protocol. **Motivation** sAVAX is a Liquid Staking token that allows a user to unlock liquidity while participating in securing the Avalanche network. As sAVAX constantly increases in value from network validation reward, listing sAVAX would allow users to unlock liquidity as a collateral for loans and in turn generate revenue to AAVE. Revenue in the form of sAVAX will always grow from the said network validation reward. sAVAX is the largest Liquid Staking token on Avalanche and has over 2M sAVAX in circulation with deep liquidity in AMMs to support a healthy lending market ecosystem. **Specifications** 1. What is the link between the author of the AIP and the Asset? The author of the AIP is a representative of the BENQI team. 2. Provide a brief high-level overview of the project and the token BENQI Liquid Staking solution that allows a user to stake AVAX to receive sAVAX. AVAX that is staked will then be delegated to nodes to run network validation that generates approx 7.20% APR. 3. Explain positioning of the token in the AAVE ecosystem. Why would it be a good borrow or collateral asset? sAVAX is a yield bearing asset as validation reward is accrued and realised upon redemption for AVAX. Using a yield bearing asset as a collateralised asset would increase the interest earned on supplying and reduce the cost of borrowing. 4. Provide a brief history of the project and the different components: DAO (is it live?), products (are they live?). How did it overcome some of the challenges it faced? 5. How is the asset currently used? There is over 2M AVAX (~ $160M) being staked via BENQI and over $170M of liquidity across AMMs. sAVAX is integrated by protocols such as Anchor, Ribbon Finance, More Money, Trade Joe, Kyber and Pangolin. 6. Emission schedule No emission schedule 7. Token (& Protocol) permissions (minting) and upgradability. Is there a multisig? What can it do? Who are the signers? sAVAX cannot be minted without staking AVAX in the contract. A multisig is currently the owner of the minting contract of BENQI’s core team. 8. Market data (Market Cap, 24h Volume, Volatility, Exchanges, Maturity) Market Cap: $168M 24hr Volume: $2.2M Exchanges: [Trader Joe, Kyber, Pangolin ](https://snowtrace.io/token/0x2b2C81e08f1Af8835a78Bb2A90AE924ACE0eA4bE#tokenExchange)CoinGecko: [https://www.coingecko.com/en/coins/benqi-liquid-staked-avax ](https://www.coingecko.com/en/coins/benqi-liquid-staked-avax) 9. Social channels data (Size of communities, activity on Github) Twitter: [62.9k](https://twitter.com/BenqiFinance) followers Telegram: [13.35k](https://t.me/BENQIFinance) followers 10. Contracts date of deployments, number of transactions, number of holders for tokens Date of deployment: 27 January 2022 Number of transactions: [59902](https://snowtrace.io/token/0x2b2C81e08f1Af8835a78Bb2A90AE924ACE0eA4bE) tx Number of holders: [4070](https://snowtrace.io/token/0x2b2C81e08f1Af8835a78Bb2A90AE924ACE0eA4bE#balances) holders **Technical Specifications** sAVAX uses a pool share system in which the token increases in value due to the increasing AVAX balance in the pool. Staked AVAX is withdrawn from the C-chain smart contract and imported into the P-chain for delegation. The withdrawal and delegation process is currently protected in a hardened memory-only runtime environment with no remote access and extremely restricted physical access. AVAX is delegated to reputable validators randomly to ensure reliable performance and validation rewards. When delegations expire, the rewards are added to the pool and redelegated alongside the principal amount to compound rewards. The architecture is currently transitioning into a distributed, multi-party computational system which ensures that the private key of the off-chain bot is not known to any entity at any time. For transactions to be executed, multiple wardens must be in consensus regarding the transaction validity, and the wardens have to sign the transactions independently using their own keys. Only when all wardens agree and have signed the transactions can the final transaction be constructed for execution. It is suggested that the AIP only be implemented once the transition is complete. **Proposed Technical Parameters** sAVAX is proposed to start with 50% LTV and a $10m borrow cap in an isolated pool with AVAX and stablecoins USDC and USDt. ---
**Author:** ![raho](https://avatars.discourse-cdn.com/v4/letter/r/bbce88/32.png) [@raho](https://governance.aave.com/u/raho)\ **Post date:** [April 20, 2022, 4:16pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/2 "2022-04-20T16:16:09Z")
I like this proposal, Aave has seen success with stETH/ETH strategies, and I believe that something similar can be done if sAVAX is added. The success of stETH/ETH has brought new strategic opportunities to light such as stETH/ETH in their own respective E-mode pool. I think it would be beneficial to eventually have an E-mode pool dedicated to sAVAX/AVAX, as well. ---
**Author:** ![luigidemeo88](https://avatars.discourse-cdn.com/v4/letter/l/e495f1/32.png) [@luigidemeo88](https://governance.aave.com/u/luigidemeo88)\ **Post date:** [April 21, 2022, 11:46am UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/3 "2022-04-21T11:46:01Z")
I am in favor of this proposal. sAVAX opens the door to much more efficient capital usage. The Benqi team has been tirelessly pursuing this option and has security at top of mind. ---
**Author:** ![fig](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/fig/32/7063_2.png) [@fig](https://governance.aave.com/u/fig)\ **Post date:** [April 21, 2022, 1:43pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/4 "2022-04-21T13:43:57Z")
sAVAX would be a good companion to stETH and deepen Aave’s support of liquid staking tokens. These tokens offer users more utility and additional yield, plugging into other protocols across a myriad of chains and networks. You can see this range here: > [@Team\_BENQI](#): > > Anchor, Ribbon Finance, More Money, Trade Joe, Kyber and Pangolin. One of the many benefits of liquid staking is to allow for integrations such as these. I support this addition and a wider scope for the Aave end user. ---
**Author:** ![afromac](https://avatars.discourse-cdn.com/v4/letter/a/b3f665/32.png) [@afromac](https://governance.aave.com/u/afromac)\ **Post date:** [April 21, 2022, 6:43pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/5 "2022-04-21T18:43:37Z")
Hi @Team_BENQI Cormac here from Index Coop. Great to see this discussion happening. sAVAX being listed on Aave would enable Index Coop to build a leveraged staked AVAX in future. We launched icETH two weeks ago - a similar product using stETH as the underlying. It has already reached 14M AUM. We would love to repeat this success with the Aave, Benqi and Avalanche teams. > **[Dune](https://dune.com/indexcoop/icETH)** > > Blockchain ecosystem analytics by and for the community. Explore and share data from Ethereum, xDai, Polygon, Optimism, BSC and Solana for free. ---
**Author:** ![Alex\_BertoG](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/alex_bertog/32/5195_2.png) [@Alex\_BertoG](https://governance.aave.com/u/Alex_BertoG)\ **Post date:** [April 21, 2022, 6:58pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/6 "2022-04-21T18:58:17Z")
Thanks for this proposal Would love to understand better the underlying risks of sAVAX , you could use Aave Risk Framework for example [Methodology - Risk](https://docs.aave.com/risk/asset-risk/methodology) ---
**Author:** ![raho](https://avatars.discourse-cdn.com/v4/letter/r/bbce88/32.png) [@raho](https://governance.aave.com/u/raho)\ **Post date:** [April 22, 2022, 12:45pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/7 "2022-04-22T12:45:11Z")
Love to see this for the Aave ecosystem! ---
**Author:** ![raho](https://avatars.discourse-cdn.com/v4/letter/r/bbce88/32.png) [@raho](https://governance.aave.com/u/raho)\ **Post date:** [April 22, 2022, 12:55pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/8 "2022-04-22T12:55:23Z")
I definitely agree that there should be a risk assesment involved with _any_ new asset listing. However, If an asset is deploying in ISO mode, does the v2 Risk Methodology give an accurate risk assessment? The reason I ask is because it is my understanding that ISO mode will mitigate certain risks involved with new asset listings. (P.S. I would be happy to begin thinking of ways that a new risk methodology could be created for Aave v3 New Asset Listings, that would take ISO mode into account) ---
**Author:** ![Alex\_BertoG](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/alex_bertog/32/5195_2.png) [@Alex\_BertoG](https://governance.aave.com/u/Alex_BertoG)\ **Post date:** [April 22, 2022, 1:45pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/9 "2022-04-22T13:45:50Z")
That would be great! I think this methodology that’s been used since Aave v1 is still relevant - would be great to expand and improve it for v3 ---
**Author:** ![Team\_BENQI](https://avatars.discourse-cdn.com/v4/letter/t/a587f6/32.png) [@Team\_BENQI](https://governance.aave.com/u/Team_BENQI)\ **Post date:** [May 3, 2022, 3:29am UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/10 "2022-05-03T03:29:11Z")
Title: sAVAX Security and Risk Assessment Author: BENQI\_team **Security and Risk Assessment** ![](https://lh5.googleusercontent.com/DB0v7YJM7NFiwEZ3yF2Y9Kk_Uydg2t8hGglOLhpo1TEiXjUYxiSMRimABmGu1Pz5O17RagNbZ-NbvOlj9jBHAAnN2WZaN41gQCj3oTq_a8YpEp0Fjj_CpShvH8V5sjtETGeKRcXrmmIVuXqvSw) The goal of sAVAX (Liquid Staked AVAX) is to enable users to secure the Avalanche network while participating in DeFi. This allows users to mint sAVAX by staking AVAX where other protocols within the network can build on sAVAX. **Smart contract risk - D+** Liquid Staked AVAX token, sAVAX, was launched in February 2022. It is the receipt token that users receive for staking AVAX. sAVAX can be redeemed for AVAX after a 15-day cooldown period in a 2-day redemption window. In the two months after sAVAX was launched, there have been more than 79,000 transactions. **Counterparty Risk - D+** The sAVAX token is currently held in a 4/7 multisig by the team. However, the multisig is expanding to 10 signers that will include non-team members. These non-team members are: Mark Stanwyck from Avalaunch TN from Pendle Marc Zeller from AAVE To further decentralize the protocol, BENQI is reaching out to more partners and protocols to be part of the multisig. Minting of sAVAX can only be done by a user staking AVAX within the smart contracts. These contracts have been audited by [Halborn](https://162914606-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MViz_ikDZy4OemUj_VI%2Fuploads%2Fsjpc2u859ZnLjsedBuel%2FBenqi_LiquidStaking_Smart_Contract_Security_Audit_Report_Halborn_Final.pdf?alt=media&token=6b646d03-5123-42cd-b210-2238f8d0242b) and had formal verification by [Certora](http://certora.com/wp-content/uploads/2022/04/benqiApril2022.md-Grip.pdf). BENQI is also a partner of [Immunefi](https://immunefi.com/bounty/benqi/) for bug bounty reporting. **Market Risk - B** As sAVAX is a receipt token for staked AVAX, price action and volatility is highly correlated to AVAX. As sAVAX is integrated across the Avalanche ecosystem with protocols such as Kyber, Platypus, Yeti, Anchor, Trader Joe and Pangolin, sAVAX’s market cap has been increasing alongside the number of holders and transactions. Liquidity depth on DEXs are deep, with more than $120m in [liquidity](https://staking.benqi.fi/defi) across the DEXs on Avalanche with $5.5m volume traded today. - Platypus - $63m - Trader Joe - $39m - Kyber - $19m - Pangolin - $5m At the time of writing, Platypus have just released a [stableswap for sAVAX-AVAX](https://medium.com/platypus-finance/never-been-seen-before-savax-avax-non-stablecoin-pool-is-launching-on-platypus-11f3bd928c41) that is projected to reduce the slippage of sAVAX trades. **Updated Proposed parameters** sAVAX is proposed to start with 50% LTV and a 500,000 sAVAX supply cap. It is also proposed that eMode be enabled with AVAX as the asset is highly correlated. _Normal Parameters:_ 50% LTV 65% Liquidation threshold 10% Liquidation bonus 10% Reserve factor 500,000 $sAVAX Supply cap 0 $sAVAX Borrow cap _eMode Parameters:_ 95% LTV 97% Liquidation threshold 2.5% Liquidation bonus No custom oracle In eMode, sAVAX is allowed to have a higher LTV for borrowing AVAX as the asset is highly correlated. As supply and borrow cap is enabled, the risk is quantifiable and contained, especially with a cautious LTV to start off with in non eMode. ---
**Author:** ![MarcZeller](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/marczeller/32/7124_2.png) [@MarcZeller](https://governance.aave.com/u/MarcZeller)\ **Post date:** [May 3, 2022, 12:02pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/11 "2022-05-03T12:02:59Z")
thanks for this, just an suggested edit for risk parameters : _Normal Parameters:_ 50% LTV 65% Liquidation threshold 10% Liquidation bonus **10% Reserve factor** 500,000 $sAVAX Supply cap 0 $sAVAX Borrow cap _eMode Parameters:_ 95% LTV 97% Liquidation threshold **2.5** % Liquidation bonus (5% would not be enforceable due to 97% liquidation threshold) No custom oracle ---
**Author:** ![Team\_BENQI](https://avatars.discourse-cdn.com/v4/letter/t/a587f6/32.png) [@Team\_BENQI](https://governance.aave.com/u/Team_BENQI)\ **Post date:** [May 3, 2022, 12:11pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/12 "2022-05-03T12:11:00Z")
thanks for the suggestion. updated the post! ---
**Author:** ![Team\_BENQI](https://avatars.discourse-cdn.com/v4/letter/t/a587f6/32.png) [@Team\_BENQI](https://governance.aave.com/u/Team_BENQI)\ **Post date:** [May 4, 2022, 7:41am UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/13 "2022-05-04T07:41:54Z")
Appreciate the discussion so far. In the meantime we have created a snapshot vote that will go live in approx 24 hours: [https://snapshot.org/#/aave.eth/proposal/0xdce03239f56932dfe5a074e20cefcdb0953ece31924814c83f7466910a5df602](https://snapshot.org/#/aave.eth/proposal/0xdce03239f56932dfe5a074e20cefcdb0953ece31924814c83f7466910a5df602) ---
**Author:** ![Pauljlei](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/pauljlei/32/3488_2.png) [@Pauljlei](https://governance.aave.com/u/Pauljlei)\ **Post date:** [May 5, 2022, 8:04pm UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/14 "2022-05-05T20:04:20Z")
Gauntlet is BENQI’s partner for managing market risk and has assisted in [initial parameterization](https://twitter.com/BenqiFinance/status/1521469994324103169) of sAVAX’s listing on the BENQI money market on Avalanche. While Gauntlet currently supports Aave v2 on Ethereum, we plan on supporting v3 down the line. Once we have built our simulation model infrastructure to support v3, we look forward to tuning risk parameters to optimize capital efficiency and manage market risk for sAVAX should the community decide to list sAVAX. As a side note, Gauntlet is currently prioritizing integrating with Aave Arc to drive institutional growth. v3 support will follow afterwards. ---
**Author:** ![yuradmt](https://avatars.discourse-cdn.com/v4/letter/y/b2d939/32.png) [@yuradmt](https://governance.aave.com/u/yuradmt)\ **Post date:** [June 28, 2022, 9:28am UTC](https://governance.aave.com/t/arc-add-support-for-savax-benqi-liquid-staking-avax-token-on-aave-v3/7892/15 "2022-06-28T09:28:24Z")
As a part of Certora continuous formal verification activity, we have conducted a formal verification of sAVAX token code using our generic ERC20 token specification. It’s important to note that this is strictly a technical analysis of the smart contract code. **How to look at the dashboard** With Certora technology, we write rules that specify how a smart contract should behave and the tool either proves that the rule always holds or finds a counterexample. It’s impossible to specify general rules for all the ERC20 tokens, since they all have different features. We have chosen to specify a set of strict rules for tokens, for example “supply should always be fixed” and “transfer should always work”. As a result, a token with dynamic supply will obviously fail the fixed supply rule, and a token that has a pause and/or a blacklist function (like USDC) will fail the “transfer should always work”. In the case of ERC20, the point of these rules is usually to present precise information about the token behavior to the community. This is how we should look at rule failures - usually not as bugs but as information about token features. Having said that, here is our **dashboard with the findings** : [https://www.certora.com/erc20s/aave-listings/](https://www.certora.com/erc20s/aave-listings/) Here is the rule failures explanation: - NoChangeTotalSupply rule fails because has sAVAX has dynamic supply by design. - transferCorrect and transferFromReverts rules fail because the token is pausable and transfers don’t work correctly in a paused state. - otherBalanceOnlyGoesUp rule fails because the token contract itself holds a dynamic balance of tokens in cooldown, and some operations like redeem() decrease the contract’s balance by design. In summary, the sAVAX token code complies with our generic ERC20 specification and all the violations are by design. **Community feedback** Our generic ERC20 verification is a work in progress and we’d love to get your feedback about it. What other technical information would you like to see?