What is Tranchess (CHESS)?
CHESS is the native token of Tranchess, which is a yield-enhancing tracker that creates different risk categories for investors with different risk profiles. The Tranchess crypto project seeks to meet the investment needs of various types of investors. This includes conservative investors who prefer holding low-risk stablecoins, long-term believers in popular assets such as BTC, ETH, and BNB, or high-risk investors who tend to have leveraged portfolios.
Curious about the current CHESS price? Check out the Tranchess price chart above.
The project's name is inspired by the French word “Tranche”, which is associated with tranche funds. These types of funds cater to different investors with varied risk tolerance. Generally, there is a junior and a senior tranche. A senior tranche may offer a fixed rate of return, while a junior tranche may be variable and far more profitable. If the product underperforms, the senior tranche is still paid out but at the expense of the junior tranche. Even though the setup of Tranches may be slightly different from traditional tranche funds, the idea is much the same.
In addition to that, the name also draws inspiration from the game of Chess.
Trachess utilizes a pricing model called Time-Weighed Average Price (TWAP) to filter out asset prices. It also uses trusted decentralized oracles such as Chainlink. Furthermore, it has an effective funding cost, supported by the USDC lending rate on the Venus protocol.
How Does Trachess Work?
The main fund of Tranchess is called the token QUEEN. This fund tracks a specific underlying asset, say ETH, but it is split equally into two sub-funds. One sub-fund, BISHOP, provides risk-averse investors with a high-yield token. The other sub-fund, the ROOK token, offers risk-seeking investors leveraged exposure to the underlying asset.
To illustrate, let's assume that you are an aggressive investor who believes in a long-term uptrend of BTC prices. You can put a leveraged long position in BTC using margin. This position will earn you big profits if the BTC price goes up. However, if the price falls, you could lose all your money due to forced liquidation. In another scenario, your exchange may lack bids monetarily due to a flash crash, which would lead to the liquidation of your assets. However, the scenario on the particular exchange may not be a clear reflection of the general market price. Contrarily, if BTC prices go up significantly, your investment cost may go up due to high interest. The ROOK token is designed to solve this problem by providing BTC, ETH, and BNB leveraged exposure without risking forced liquidation.
In another scenario, assume you are a passive investor who prefers to hold stablecoins. You may be focused on preserving your capital yet looking for more fixed-income returns. Usually, you can invest your stablecoin in a lending protocol to earn profits. You can also invest in yield farm governance tokens by providing liquidity to an automatic market maker (AMM) pool. However, the price of your deposited asset may drop. In this case, you might suffer from impermanent loss. BISHOP token allows you to invest both ways without the impermanent loss risk. The token performs like a stablecoin. It earns interest by lending liquidity to ROOK token holders for its leveraged exposure. The token also allows holders to invest in Tranchess’ governance token, CHESS. BISHOP is a solution for passive investors looking for stable and attractive returns.
Lastly, you may be a long-term holder of, let's say, BNB, a high market cap asset. Such assets usually have low yields due to their availability on the general market. Tranchess’ QUEEN tokens solve the problem in two ways. One, it runs its BNB chain validator node and delegates its BNB funded by its investors. Two, QUEEN allows holders to farm CHESS tokens. It supports a single-asset strategy, which prevents impermanent loss even when the Tranchess price falls in the market. CHESS token is widely traded in major exchanges. Like any other cryptocurrency, the Tranchess price may vary due to various factors.
Now, let's put this together – the Tranchess ecosystem consists of the QUEEN token, which is created by depositing BNB, BTC, and ETH. QUEEN traces its underlying asset. At some point, QUEEN splits into BISHOP and ROOK tokens. ROOK provides a leveraged market exposure to any underlying asset through liquidity borrowed from BISHOP. BISHOP, on the other hand, provides holders with a higher yield in terms of lending interest.
Who Founded Tranchess?
Tranchess was founded by a tech team led by Danny Chong. The team is full of blockchain and financial experts with diverse backgrounds. Danny had worked for multinational companies such as BNP Paribas and Societe Generale. The team’s vision is to contribute to the shift from traditional centralized finance (CeFi) to decentralized finance (DeFi).
What Can You Do With CHESS Tokens?
CHESS is a governance token of the Tranchess crypto project. In addition to allowing users to vote on the interest spread paid to BISHOP holders, it is also used to redistribute 50% of the protocol's income.
Don't forget to take a look at the Tranchess price chart if you want to see the current CHESS price.
Tranchess Tokenomics
The maximum supply of CHESS tokens is 300 million. The tokens are distributed as follows: Community Incentives (50%), Core Team (20%), Future Investors (15%), Ecosystem Treasury (10%), and Seed Investors (5%).
