The turbulence in the crypto market never stops, and the DeFi field continues to move forward amidst this turmoil. The expectations of interest rate cuts faced by the global economy are quietly changing investors’ risk preferences and return demands.

In an environment where market narratives are drying up, discussions about DeFi are once again on the rise. DeFi projects that have gone through a complete bull-and-bear cycle are no longer satisfied with simply copying traditional financial models. Instead, they are beginning to deeply consider how to better meet market demands.

From the rebranding of MakerDAO to the emergence of various novel revenue strategies, the entire ecosystem is undergoing a profound transformation. At the same time, Binance, as an industry giant, is also actively pursuing changes. The meme boom on BNB Chain, as well as the high-frequency listing of projects within the ecosystem… This series of actions are sending positive signals to the market.

Amidst the unpredictable waves of change, Tranchess, the OG DeFi protocol of the BSC ecosystem, stands out among the products on the same track with its unique structured fund structure. By cleverly combining the concept of structured funds with DeFi innovation, it provides investors with a unique DeFi experience. As market demands evolve, Tranchess continues to advance product iterations, collaborating with multiple projects to match market needs.

This article will delve into Tranchess’s multiple innovations, analyzing how Tranchess leverages its inherent advantages and mechanism innovations to carve out a unique path of returns for investors in the current market environment. Whether you’re a DeFi veteran or a newcomer to this field, we believe this article will provide you with some new insights.

Why DeFi？

Faced with the diverse crypto ecosystem, not only external users but even crypto veterans have some thoughts: With so many new ideas constantly emerging, why is DeFi still worth focusing on?

Andre Cronje recently published an article “Why DeFi is the key to the future?” ” provides some relevant insights.

The article points out that DeFi is essentially a liquidity hub and a place for trading needs. In each on-chain ecosystem, DeFi plays an indispensable role, providing necessary liquidity support for the market while meeting diverse financial needs ranging from simple token exchanges to complex derivative trading.

AC mentioned: “Anyone willing to try can participate, which is an important cornerstone of economic growth.” The openness and composability of DeFi make it an ideal testing ground for financial innovation, whether it is a bull market or a bear market, DeFi remains the core engine maintaining the vitality of the ecosystem.

Tranchess, a DeFi Powerhouse Through Bull and Bear Markets

Tranchess emerged during the DeFi wave of 2021, coinciding with the peak of the crypto bull market. However, Tranchess has not only demonstrated remarkable resilience throughout the lengthy market cycle but has also injected new vitality into itself through continuous iterative innovations, fully showcasing its deep strength as an “old OG” in the space.

According to the latest data from DeFiLlama, as of September 2024, Tranchess’s TVL on BNB Chain has reached $183 million, with a year-to-date growth of nearly 500%.

Professional Team

Tranchess’s ability to maintain vitality through deep bear markets is inseparable from the strength of its professional team. Tranchess is composed of a team with rich backgrounds in blockchain and finance. Core team members have extensive traditional finance experience, including investment banking, asset management, and hedge funds.

Co-Founder Danny Chong, a graduate of Nanyang Technological University, has over ten years of banking experience, including trading, sales, and management in the Asia-Pacific region.

The technical team also boasts impressive experience in network security for centralized exchanges and DeFi protocols, with team members hailing from tech giants such as Google, Meta, and Microsoft.

A DeFi Protocol Inspired by the “Tranches” Concept

Tranchess’s inception was inspired by the “Tranches” concept from traditional finance. The protocol innovatively offers tiered, multi-structured asset investment solutions for investors with different risk appetites.

Tranchess provides two categories of core services:

• Liquid Staking Services: Tranchess’s liquid staking services are primarily represented by nQUNEE, the staking token for BNB Chain, and qETH, the staking token for Ethereum mainnet. Taking qETH as an example, users can stake ETH on the Ethereum mainnet to obtain qETH. While enjoying staking rewards within the protocol, qETH can also be used as collateral in external DeFi protocols, improving capital efficiency.
• Tiered Return Products: Tranchess also offers diversified risk-return solutions based on the main fund QUEEN, splitting QUEEN into two derivative tokens, BISHOP and ROOK, according to different risk-return profiles, aiming to meet the needs of investors with varying risk appetites. Today, Tranchess has further optimized its product structure, upgrading it to the more flexible Turbo&Stable architecture.

Chess Without Fixed Moves: From Structured Funds to Turbo & Stable

From the tiered model to Turbo & Stable, Tranchess’s iterations are like a wonderful chess game, with each move being a precise response to market changes.

Opening Move: Structured Funds with Tiered Responses

The structured design is the core innovation of the Tranchess design philosophy. It involves splitting a single asset into derivatives of different risk levels. This structure allows investors to choose an appropriate investment strategy based on their risk appetite. Specifically, Tranchess divides assets into three levels:

Main Fund Token QUEEN

QUEEN is the underlying asset, pegged 1:1 to the underlying crypto assets. As the primary fund unit in the overall structure, users can hold QUEEN directly to gain full exposure to the underlying assets. QUEEN can be minted, redeemed, and split into BISHOP and ROOK. QUEEN’s revenue sources include price changes of the underlying assets, staking rewards (if the underlying assets support staking), and protocol revenue distribution.

For example, with BTC, QUEEN holders not only enjoy returns from Bitcoin price movements but can also earn additional CHESS governance token rewards through staking. Investors can directly exchange BTC for QUEEN or purchase it with USDC on Tranchess Swap.

Derivative Tokens: BISHOP and ROOK

The two derivative tokens BISHOP and ROOK split into by QUEEN represent different risk and return characteristics.

BISHOP is a fixed income token with lower risk and provides stable income, similar to fixed income products. Its source of income is a fixed QUEEN rate of return, which is regularly adjusted by the protocol based on market conditions. BISHOP provides relatively stable returns during market fluctuations and is suitable for risk-averse investors.

ROOK is a leveraged token with higher risk, provides leveraged returns, and is more sensitive to changes in underlying asset prices. ROOK’s revenue is derived from the entire residual income of QUEEN (that is, the total income minus the part paid to BISHOP). When the market rises, ROOK can obtain excess returns, but it also faces greater downside risks.

The structured fund design allows investors to flexibly adjust their positions based on their risk preferences. Investors can switch between QUEEN, BISHOP, and ROOK at any time, implementing personalized risk management strategies. For instance, when expecting market uptrends, one can increase ROOK holdings for higher returns; when expecting market downturns, one can increase BISHOP holdings for stable returns.

The flexible tiered structure allows Tranchess to expand to more crypto-assets in the future, providing investors with broader market participation opportunities. Whether it is BTC, ETH or BNB, Tranchess has the potential to create corresponding structured products to meet the needs of different investors.

Turbo&Stable: Tactical Innovation on the Chessboard

With the launch of the liquid staking product qETH on the ETH mainnet, Tranchess has introduced the concept of “Turbo&Stable” into its product ecosystem.

The Turbo & Stable model is essentially a subdivision upgrade of structured funds. The concepts of Turbo and Stable can also be understood as enhanced products of ROOK and BISHOP.

Turbo (Enhanced ROOK): A High-leverage, High-yield Offensive Tool

Like an indomitable rook in a chess game, Turbo products offer higher leverage and potential returns, and are suitable for investors who are willing to take higher risks. It’s like a bold move in a chess game, with the potential for significant gains but also greater risks.

Stable (Enhanced BISHOP): A Defensive Fortress of Stable Returns

Similar to the Flexible Bishop (BISHOP), Stable product provides more stable returns and becomes a defensive core in a portfolio. It provides an ideal choice for investors looking for stable returns with a low risk appetite, like building a solid defense in a chess game.

Detailed Explanation of Turbo&Stable: Taking StakeStone’s STONE Fund as an Example

To make the concept less abstract, let’s use the Turbo&Stable product STONE Fund, a collaboration between Tranchess and StakeStone, as an example to explain how this structure works.

Simplifying Complexity: Flexible Split of Two Types of Tokens

The core of the STONE Fund lies in its token split mechanism based on the Turbo&Stable architecture. Users can exchange STONE at a 1:1 ratio for stoneQUEEN, and each stoneQUEEN can be split into 0.1 turPSTONE (Turbo Point STONE) and 0.9 staYSTONE (Stable Yield STONE). This process is reversible, allowing users to combine 0.1 turPSTONE and 0.9 staYSTONE back into 1 stoneQUEEN.

Diverse Returns from staYSTONE-STONE LP

Tranchess also introduced the staYSTONE-STONE LP token to provide additional revenue opportunities for ecosystem users.

These LP token holders not only receive CHESS tokens and 0.05% transaction fee rewards, but also enjoy part of the staYSTONE interest and a 2x StakeStone points multiplier (for the STONE portion of LP). In addition, Tranchess provides an additional weekly reward of 150,000 CHESS to STONE fund LPs.

Different Point Rewards and Yield Structures

The Tranchess STONE Fund has a total staking period of 6 months, ending on October 8, 2024. At that time, different types of tokens can be exchanged back to STONE based on their fair value. Tranchess also allows STONE holders on Scroll to earn both StakeStone points and Scroll Marks points simultaneously.

stoneQUEEN can be exchanged 1:1 with STONE, and holding stoneQUEEN earns the same multiplier of StakeStone points as holding an equal amount of STONE. However, splitting stoneQUEEN into staYSTONE and turPSTONE and holding both can earn a 2x points multiplier without loss, while also earning Scroll Marks points based on the holding value.

turPSTONE not only has a fixed 10x leverage rate but also earns a 2x StakeStone points multiplier, resulting in a 20x StakeStone points multiplier. After deducting the cost of paying a fixed rate to staYSTONE at the end, the ratio of turPSTONE to STONE will be less than 1 when the fund matures.

staYSTONE offers investors seeking stable returns a fixed annual interest rate of 6%, but without StakeStone points rewards. It earns Scroll Marks points based on the holding value. At the expiration of the fund, staYSTONE:STONE>1

Additionally, Tranchess will charge a 3% fee from the points earned by Turbo & Stable fund products as extra income, which will be 100% distributed to veCHESS holders, increasing their yield.

PS: The exchange ratios of turPSTONE, staYSTONE, and STONE mentioned in the text are rough estimates. The exact ratios will be determined based on the specific fair value and announced as the fund approaches its end.

Fast and Efficient: A Precision Architecture for Rapid Replication

The Turbo&Stable products are not limited to the STONE Fund. Currently launched Turbo&Stable products also include the weETH Fund in collaboration with eth.fi, the Staked ETH Fund with LIDO, SolvBTC in partnership with SOLV, slisBNB in collaboration with Lista DAO, and the recently launched SolvBTC.BBN Fund.

Not only does Turbo&Stable offer diverse yield strategies, but it also supports rapid deployment on any chain with an LST narrative. It can flexibly adapt to corresponding asset yield changes, as exemplified by the recently launched SolvBTC.BBN. As the project with the most staked BTC in the early stages of the Babylon ecosystem, it currently offers the highest Babylon point yields among LRTs. As another component of user returns, this advantage is preserved within the Turbo&Stable structure, fully demonstrating the flexible characteristics of this precision architecture that is both efficient and adaptable.

Tranchess’s Key Move: CHESS & veCHESS

Recently, CHESS’s listing on Binance futures has once again drawn attention. As Tranchess’s governance token, CHESS and veCHESS are not only the crucial links connecting the entire Tranchess system, but their intrinsic value also grows alongside the project itself.

Governance Token CHESS

CHESS has a total supply of 300 million tokens. Apart from direct purchase, users can obtain CHESS through various means, mainly including participating in liquidity mining or staking QUEEN, BISHOP, and ROOK tokens.

After locking CHESS to convert it into veCHESS, users can unlock diverse use cases within the ecosystem: veCHESS grants voting rights, weekly protocol dividends, and 3% of Turbo & Stable points income, among other governance benefits.

In addition to liquidity and governance functions, CHESS currently supports cross-chain functionality across BNB Chain, Ethereum, and Scroll.

Locking Transformation: veCHESS Activation!

Locking CHESS for Conversion

Users can choose to lock their CHESS for periods ranging from 1 week to 4 years. The conversion ratio increases linearly with the lock-up time. The specific calculation for veCHESS quantity is: CHESS amount multiplied by lock-up time (in years) divided by 4.

For example, locking 100 CHESS for 4 years will yield 100 veCHESS, while locking 100 CHESS for 2 years will yield 50 veCHESS. The amount of veCHESS decreases linearly over time, but users can increase their veCHESS balance by extending the lock-up time or increasing the locked amount.

Tranchess also supports locking CHESS in batches, with each lock creating a new lock position. For easier management, users can merge multiple lock locations into one.

Layers upon Layers of Additional Benefits

In addition to the 3% point income return of the Turbo&Stable fund products mentioned above, veCHESS holders will also receive 50% of the weekly income of the Tranchess platform as an additional staking reward, and the other 50% of the income will go to the Treasury.

Continuously Enriching Governance Rights

Users holding veCHESS can participate in various important decisions on the Tranchess platform. Voting weight is proportional to the amount of veCHESS held, ensuring that users with long-term commitment to the platform have a greater say in the decision-making process.

Recently, the Tranchess community passed Governance Proposal 9, which suggests expanding veCHESS voting governance rights to the decision-making level for all new Turbo & Stable project launches. This proposal further expands more use cases for veCHESS while showcasing the future potential for rapid replication of the Turbo & Stable architecture.

Undervalued Opportunities Beneath The Hype?

As we delve deeper into the Tranchess ecosystem, it becomes evident that CHESS is not merely a simple governance token, but rather the core value carrier within the Tranchess ecosystem.

The veCHESS obtained by locking CHESS can not only bring generous revenue sharing, but also give holders the power to participate in major decisions of the platform. The blessing of dual attributes makes CHESS an extremely attractive value storage and value-added tool.

With the continuous growth of the platform’s TVL, the official launch of perpetual contracts, and several Turbo&Stable fund products nearing maturity, CHESS is likely at a value point. The earning potential of veCHESS may be sufficient to cover the current market’s price perception of CHESS. The true potential value of CHESS is not limited to market speculation expectations for the DeFi sector or short-term “lottery mentality” for a single token to be listed on exchanges, but rather long-term, value-supported product returns.

Innovation is Key to Gaining the Upper Hand

From structured funds to the Turbo&Stable architecture, the veteran player Tranchess has consistently maintained excellence and flexibility in the highly competitive DeFi track. While ensuring diverse returns for users, it provides more solutions for various ecosystems, implementing a truly DeFi Native style.

Tranchess’s development trajectory proves that only by innovating and consistently maintaining a crucial half-move advantage can one maintain an unbeatable position in the grand chess game of crypto.

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