Tranchess (CHESS)

Basics

• Based in:
• Started in / Announced on: early 2020
• Testnet release:
• Mainnet release: 24-6-2021

• From CoinDesk (5-7-2021):

"In essence, the protocol seeks to provide a risk/return matrix from a single main fund, known as Queen, that tracks a specific underlying crypto asset."

Audits & Exploits

• Tranchess' Bug Bounty program rewards participating users with up to 50K for the most critical of finds (23-9-2021). Update (19-1-2022): got updated to 200k.
• Got updated to 77% on 19-1-2022:

"Activity is over 10 transactions a day on contract TransparentUpradbleProxy.sol (swap contract), as indicated in the Appendix. There is no evidence of code coverage in any of the Tranchess documentation, but there is a complete test suite. There is no evidence of a test result report in any of the Tranchess documentation. Peckshield performs another audit post mainnet launch on September 10th 2021. Peckshield performs another audit post mainnet launch on December 24th 2021."

• Previously scored 66% on DeFi Safety (24-9-2021):

"Certik published a Tranchess audit report on June 2nd 2021, which is before their mainnet launch in July 2021.

PeckShield published a Tranchess audit on June 28th 2021, which is before their mainnet launch in July 2021.

Note: Fix recommendations were implemented by the Tranchess team."

With the comment: "They have strong documentation, and strong security, but there isn't any information about what the admins can do with the protocol available, reducing their score signifigantly."

Governance

Admin Keys

• Got updated (19-1-2022):

"Access controls are labelled and documented here. There is no evidence of a Pause Control or a similar function in the Tranchess documentation."

• From DeFi Safety (24-9-2021):

"There are currently no access controls documented in the Tranchess documentation. There is no evidence of a Pause Control or a similar function in the Tranchess documentation."

DAO

• "The full DAO UI is still under development." (12-2021) Does have snapshot voting live, and their forum went op 2-12-2021.
• From CoinDesk (5-7-2021):

"The project said it was aiming to hand over management of the protocol to the DAO by the fourth quarter of this year along with accompanying 2.0 apps."

Token

Token Allocation

• The total supply of CHESS tokens is 300M (7-1-2022);

1. "Core Team 20%
2. Seed 5%
3. Future Investors 15%
4. Community 50%
5. Ecosystem 10%

Currently, the community incentives are planned to vest throughout a 207-week time period, that is around 4 years."

Utility

• From the FAQ (11-2021):

"Currently, there are three main utilities for CHESS token, all require veChess:

1. To vote for the additional add-on of BISHOP's next-week interest rate.
2. To receive a weekly BTCB rebate, which totals 50% of the fees collected (gas fee excluded) within Tranchess.
3. To receive a boost on CHESS earning through staking."

Technology

• Whitepaper can be found here (12-2021).
• Code can be viewed here. From DeFi Safety (19-1-2022):

"With 666 commits and 2 branches, this is a robust software repository."

Implementations

• Built on: BSC
• Has aspirations of becoming a multi-chain system (5-7-2021).

How it works

• From CoinDesk (5-7-2021):

"In essence, the protocol seeks to provide a risk/return matrix from a single main fund, known as Queen, that tracks a specific underlying crypto asset.

The protocol has begun by tracing bitcoin's movements, with a goal of adding more assets in the future. The fund will attempt to serve a variety of clients with different tolerances for risk, as a user may split his or her fund into two sub-funds, Rook and Bishop, the press release stated. Bishop is a "yielding" tranche that has no exposure to bitcoin's price, while the Rook fund is a "leveraged" tranche that has twice the exposure to price movements in the underlying crypto. Once a user splits up his Queen fund into these sub-funds, that user can then sell one fund instantaneously, leaving him with either fixed income or leveraged exposure to bitcoin, a spokesperson for the project told CoinDesk via Telegram.

"The main fund, Queen, currently tracks bitcoin and can be split into 0.5 Bishop tokens and 0.5 Rook tokens," the spokesperson said."Bishop tokens purely earn more yield and does not track bitcoin at all, while Rook tokens earn smaller yield but are essentially a 2x leverage token for bitcoin."

Its chess-inspired theme borrows from some concepts of the game, including implementing game theory of the Bishop interest voting system, which allows users to vote on how much interest the fund will generate. Meanwhile, the governance token – used to cast votes and make decisions regarding the protocol – is named Chess."

Fees

• Has redemption, protocol and spliting fees (11-2021).

Staking

• Has veCHESS, as can be seen under Token, Utility, above (11-2021):

"CHESS can be locked for up to 4 years. The number of veChess you receive depends on the time you lock your CHESS for. The minimum locking time is 1 week, and for every CHESS locked, veChess increases linearly from 0 to 1 as you increase your locking time from 0 to 4 years."

• From the FAQ (11-2021):

"You can harvest CHESS by staking Token QUEEN, BISHOP, and/or ROOK in the protocol.

Users need to stake their tokens before they can trade them in Tranchess Swap, the number of tokens shown in the wallet under the Swap function is the amount already staked in the protocol."

Oracle Method

• Uses Chainlink for its BNB fund (28-12-2021).
• From the FAQ (12-2021):

"Tranchess uses a 30-minute TWAP price oracle instead of instant price to prevent price manipulation by oracle attacks. For the underlying fixing price, our oracle extends the Open Oracle standard by Compound, accepts price data signed by two Reporters (Coinbase and OKEX) and computes time-weighted average price (TWAP) in every 30-minute epoch.

We also use oracle to obtain the borrow rate of USDC from VENUS and calculate a weekly average for Token BISHOP’s interest rate calculation."

Roadmap

• Can be found here (7-2021).

Usage

• $951,131,183 TVL (7-1-2022).

Team, Funding and Partners

Team

• Full team can be found here (19-1-2022).

Funding

• From CoinDesk (5-7-2021):

"Raised $1.5 million in a seed round of funding that was led by Three Arrows Capital and Spartan Group. Other notable investors include Binance Labs, Longhash Ventures, IMO Ventures and key opinion leaders who wish to remain anonymous, according to a press release."

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