Tranchess

Tranchess, represented by the token CHESS, is a yield-enhancing asset tracker that offers varied risk-return solutions inspired by tranche funds. The project was conceptualized in 2020 by Co-Founder Danny Chong and a team with diverse backgrounds in tech firms such as Google, Facebook, and Microsoft, as well as investment banks like Morgan Stanley, UBS, and BNP Paribas.

The team's vision is to empower users of decentralized finance (DeFi) with Omni Asset Management capabilities, contributing to the shift from traditional finance to DeFi. They aim to offer a full product suite in Asset Management Protocols tailored for DeFi users across different risk capacities and appetites.

CHESS is the governance token of the Tranchess community. Users can earn CHESS by staking tokens QUEEN, BISHOP, and/or ROOK in the protocol. The total supply of CHESS tokens is 300 million, with a vesting schedule planned over a period of 207 weeks, or approximately four years.

The distribution of CHESS tokens started on June 24th, with a detailed emission schedule for all staked assets. The allocation of tokens is based on the total value locked (TVL) and community voting results.

Tranchess has been actively developing new features and partnerships, positioning itself to become a significant player in the DeFi space. Despite market fluctuations, the project continues to attract new users and has the potential to offer a unique and compelling experience for DeFi users.

Tranchess is a decentralized finance (DeFi) protocol that allows users to earn yield on their tokens through a liquid staking mechanism. The protocol is themed around chess, with three main components: Liquid Staking, Tranche, and the governance token CHESS.

In Liquid Staking, users can stake and lock ETH and BNB tokens in a liquidity pool. In return, they receive qETH and qBNB tokens, which can be traded on decentralized exchanges like Balancer, BiSwap, or PancakeSwap. These q tokens can earn trading fees by supplying liquidity, making them attractive for DeFi investors.

The Tranche component consists of three funds: QUEEN, BISHOP, and ROOK. Each fund is designed to cater to different investment strategies:

• QUEEN: Tracks the performance of a single crypto asset or a basket of assets. It offers a yield farming feature, allowing users to swap their assets for QUEEN tokens and earn additional CHESS tokens.
• BISHOP: A conservative investment strategy, offering lower returns but lower risk. It is fully collateralized and anchored to USD, allowing users to earn interest by providing liquidity to ROOK's leveraged exposure.
• ROOK: A high-risk, high-return strategy involving leveraged long positions on ETH, BNB, and BTC. Users borrow funds to buy these assets, expecting their prices to rise. ROOK uses an innovative combination of the Rebalance model and TWAP pricing to lower the risk of manipulation or volatility.

The CHESS token is the governance token of Tranchess. It is used for voting, fee rebates, and other ecosystem activities. CHESS holders can receive a weekly rebate in the form of all underlying assets available on the chain, totaling 50% of collected fees within Tranchess. The token distribution is designed to slowly reduce issuance over four years, with a long tail of fixed weekly emissions.

To participate in governance, users need to lock their CHESS tokens to gain veCHESS as voting power. CHESS can be locked for up to four years, and the number of veCHESS received depends on the time locked. This mechanism allows users to have a say in the development of the protocol and earn additional rebates.

Users can earn CHESS tokens by staking their tokens in Tranchess. The tokens are distributed weekly, with a detailed schedule outlined in the whitepaper. The CHESS emission schedule is determined by voting, ensuring that the community has control over the token's distribution.

CHESS tokens can be bought and sold on various cryptocurrency exchanges, such as Coinmerce, using credit cards or SEPA payments. Users can also execute stop-limit orders or repeating orders to manage their investments.

Overall, Tranchess offers a unique combination of liquid staking and tranche-based investment strategies, allowing users to manage their risk and earn yield on their tokens. The CHESS token plays a central role in the ecosystem, enabling governance and fee rebates.

The token Tranchess (CHESS) has several strengths:

1. Governance Token: CHESS is the sole governance token of the Tranchess community, allowing holders to participate in decision-making processes and vote on the future of the protocol.

2. Earning Mechanism: Users can earn CHESS tokens by staking Token QUEEN, BISHOP, and/or ROOK in the protocol. This incentivizes users to engage with the platform and contribute to its growth.

3. Total Supply and Vesting Schedule: The total supply of CHESS tokens is capped at 300 million, with a well-structured vesting schedule that ensures a controlled release of tokens over a period of four years. This helps maintain a stable supply and prevents rapid inflation.

4. Token Allocation: The token allocation is divided among various groups, including the core team, seed investors, future investors, liquidity mining, and the ecosystem/treasury. This ensures a balanced distribution of tokens and promotes a healthy ecosystem.

5. Decentralized and Smart Contract-Based: Tranchess is a decentralized, smart contract-based token launched on the Ethereum network, ensuring transparency, security, and trustless transactions.

6. Yield Enhancement: CHESS tokens can be used to enhance yields through various mechanisms, such as fee rebates and additional returns, making it an attractive option for investors seeking passive income.

7. Diverse User Base: Tranchess caters to different groups of users through its three tranche tokens: QUEEN for long-term holding, BISHOP for stable returns, and ROOK for leveraged trading. This diversity helps attract a broad user base and promotes the overall adoption of the platform.

These strengths contribute to the potential growth and stability of the Tranchess ecosystem, making CHESS a promising token for investors.

Tranchess, a yield-enhancing asset tracker protocol, presents various financial risks to its users. These risks are primarily associated with the different tranches and their respective investment strategies:

1. Forced Liquidation Risk:

   • ROOK Tranche: Although Tranchess employs an auto-rebalancing model to prevent forced liquidations, there is still a risk of liquidation if the value of the collateral falls below the liquidation threshold. This risk is mitigated by the use of Time-Weighted Average Price (TWAP) methodology and Chainlink oracles for accurate price feeds.

2. Market Volatility Risk:

   • ROOK and BISHOP Tranches: Both ROOK and BISHOP tranches are exposed to market volatility. ROOK, being a leveraged long position, is more susceptible to significant losses if the market moves against the investor. BISHOP, although designed for stable returns, can still be affected by market fluctuations.

3. Credit Risk:

• ROOK Tranche: The leveraged long position in ROOK is maintained by borrowing funds. This exposes investors to the risk of default by the lending parties, which could lead to losses.

4. Risk of Mislabeling or Misunderstanding:

   • All Tranches: Similar to traditional tranches in financial products, there is a risk that investors may not fully understand the characteristics and risks associated with each tranche, leading to investments that do not align with their risk appetite.

5. Governance and Management Risks:

   • CHESS Token: The governance token, CHESS, is critical to the protocol's functioning. Any issues with the token's distribution, voting mechanisms, or management can impact the overall stability and performance of Tranchess.

6. Liquidity Risks:

• All Tranches: Tranchess relies on liquidity pools to facilitate trading and staking. If liquidity dries up, it can lead to difficulties in buying or selling tokens, potentially causing losses for investors.

7. Smart Contract Risks:
   • All Tranches: As a decentralized protocol, Tranchess relies on smart contracts. Any vulnerabilities or bugs in these contracts can lead to security breaches, resulting in financial losses for users.

These financial risks highlight the importance of thorough research and understanding before investing in Tranchess and its various tranches.

• Danny Chong: Co-founder of Tranchess, leading the team with a diverse background in tech giants and prominent investment banks, focusing on DeFi and asset management.