Introducing xQI: A New Era in DeFi Yield Optimization

Vector Finance
4 min readNov 21, 2023

The Vector Finance team, in collaboration with BENQI, is thrilled to launch xQI — our innovative development designed to revolutionize the way QI tokens are utilized in the Avalanche ecosystem. This new offering marks a significant milestone in our ongoing efforts to maximize yield generation and enhance user engagement in the DeFi space.

Starting today, you can convert your QI on the Vector website and stake it for incentivized rewards!

What is xQI?

xQI emerges from a strategic partnership with BENQI, crafted to unlock the full potential of QI tokens through advanced yield-generating mechanisms. This innovative solution is tailored for the AVAX staking landscape, offering our users an exclusive opportunity to tap into a sophisticated system that promises enhanced rewards and governance influence.

The Mechanism Behind xQI

The xQI program stands as a pioneering initiative on Avalanche. We have established our own AVAX nodes for staking and reward generation, complemented by an innovative aggregation system for enhanced delegation power.

Our xQI program now enables users to transform their QI tokens into xQI on the Vector platform, leveraging these within BENQI to perpetually accrue veQI and for the first time to earn yield on QI.

1. Token Conversion and Yield Optimization

  • Convert QI to xQI on the Vector platform: A seamless process unlocking exclusive yield potential for QI on Avalanche.
  • Earn veQI: We utilize the converted QI within the BENQI ecosystem to gather veQI, enhancing our delegation power and increasing rewards for our staking nodes.

2. Boosting AVAX Delegation

  • Leverage veQI: With the acquired veQI, Vector Finance optimizes voting power to strategically delegate AVAX to our nodes, benefiting xQI stakers and VTX lockers.

3. Reward Distribution

  • AVAX staking rewards: The AVAX delegated to our nodes generates fees, distributed as passive income in sAVAX to xQI stakeholders and VTX lockers. With this addition that means VTX lockers now receive real yield in the form of USDC (from zJOE) and sAVAX (from xQI).

Converting xQI

Starting today, users can convert QI to xQI (or buy it on the open market from our xQI pool), initiating their journey in staking and reward generation. The program kickstarts with a robust VTX emission scheme, soon to be complemented by sAVAX rewards. As time goes on the VTX emissions will diminish and be replaced by real yield in the form of sAVAX rewards Remember, QI is required in your wallet for conversion, and it’s vital to authenticate the QI token before buying them off the market.

Conversion Process:

  1. Access the Vector Finance site with an Avalanche-enabled wallet.
  2. Locate the xQI pool, decide on the QI amount for conversion, and approve.
  3. Confirm the conversion and transaction in your wallet.

Don’t forget to stake your xQI afterward for rewards!

Staking xQI

To begin accruing xQI rewards, stake your xQI post-conversion. Ensure xQI is present in your wallet, and verify its authenticity before any transaction.

Staking Process:

  1. Navigate to the Vector Finance site and connect your wallet.
  2. In the xQI pool, specify the amount to stake and approve in your wallet.
  3. Initiate the staking by confirming the transaction.

After staking, you’ll start earning VTX and sAVAX rewards!

xQI Liquidity

Conversion to xQI is permanent, and integrates your QI into a continuous staking process on BENQI. To accommodate smooth transitions in and out of xQI, we’ve established a substantial QI-xQI liquidity pool on Trader Joe, ensuring flexibility and convenience for users. This pool is incentivized on the Vector site, where you can stake liquidity to earn additional VTX.

The Opportunities xQI Opens

Converting QI on our platform locks it on BENQI to perpetually earn veQI power. This power is then utilized to delegate AVAX to our staking nodes, accruing sAVAX rewards for xQI stakers and VTX lockers. The potential of veQI extends beyond current rewards, paving the way for validating subnets with unique rewards or creating novel markets leveraging veQI and its delegation strength.

This launch represents not just a new product, but a doorway to unprecedented opportunities in yield optimization and governance influence within the DeFi landscape. Join us on this exciting journey with xQI, as we redefine the possibilities in decentralized finance.

Learn more about xQI

Join Vector’s X Space for the launch of xQI on November 21 at 7PM UTC. We’ll be joined by BENQI for an exciting AMA on the launch. Set your reminders on X!

About Vector Finance

Vector Finance is the number one yield booster on Avalanche. We’re building unique DeFi strategies for our users to earn more on their assets!

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