Tranchess x Balancer: Empowering ETH Liquid Staking
We are excited to announce that after the soft launch on November 25, 2022, the Tranchess liquidity pool on Balancer is now live as the primary source of liquidity for the Tranchess ETH liquid staking fund. Tranchess’ qETH/ETH pool has recently been whitelisted and will soon join auraBAL bribing on Hidden Hand, a deeper collaboration with Balancer’s native ecosystem.
Tranchess, a yield-enhancing asset tracker with tranched solutions, has recently released our yield-enhancing protocol for ETH on Ethereum — an ETH liquid staking protocol with its signature tranches BISHOP and ROOK for further risk diversification. qETH is the liquid-staked ETH from the Tranchess Beacon chain staking system. For the convenience of future collaborations with other protocols, qETH is designed such that the staking rewards of the staked ETH are reflected as a change on the fair value of qETH, instead of a change in the number of qETH tokens. The qETH token amount will only change if users stake/unstake additional ETH with Tranchess. The qETH/ETH liquidity pool allows users to swap between qETH and ETH, while direct withdrawal is not yet supported on the Ethereum Beacon chain for now.
The nature of the qETH/ETH pool has determined that its underlying algorithm must:
- Adopt a stablecoin-like model with low slippage;
- Still support changes in the fair value of one or both of the tokens to reflect the accumulated staking rewards.
After rounds of testing, Balancer stood out as the best-suited AMM pool model for qETH/ETH liquidity pool. The pool avoids high slippage when trading within a wide price range, and accurately tracks the change in the fair value of qETH. With the Balancer model, users can easily and effectively swap between qETH and ETH without worrying about inaccurate pricing.
“Balancer is thrilled to be the building block of Tranchess’ foray into Ethereum as part of their multi-chain expansion initiative. Balancer technology aims to be a cornerstone for projects looking to expand their use cases and we look forward to being an essential part of their growth and development in the future.” — Jeremy Musighi, Balancer Ecosystem
Tranchess will also join the Balancer bribing initiative soon on Hidden Hand with CHESS. CHESS is the governance token of Tranchess and the Tranchess protocol distributes a weekly CHESS emission among various incentive pools, with the specific split percentage decided by community governance voting. The CHESS emission allocated to the qETH/ETH pool will act as bribes on Hidden Hand during auraBAL holders’ bi-weekly voting. The bribing mechanism incentivizes more BAL rewards for liquidity providers of the qETH/ETH pool, and creates an organic synergy for the growth of both Tranchess and Balancer communities. The pool will start with a 2% emission cap, which can be adjusted based on the future performance of the liquidity pool.
The qETH/ETH pool is the cornerstone of the Tranchess ETH liquid staking product on Ethereum, and the collaboration with Balancer allows Tranchess to expand further and develop its ecosystem over Ethereum on a firm foundation. Tranchess will continue to focus on expanding the utilities and yield-enhancement for qETH and liquidity providers, bringing different risk/return portfolios, as well as introducing other innovative products to the Ethereum community.
Tranchess is a yield-enhancing asset tracker protocol with liquid staking and structured products. Inspired by tranche funds’ ability to satisfy users’ varying risk appetites, Tranchess aims to provide a different risk/return matrix out of a single main fund that tracks a specific underlying asset. Tranchess launched its first fund in June 2021 and its validator staking solution for BNB in January 2022. It has recently soft-launched its ETH liquid staking product on Ethereum.
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Balancer’s mission is to accelerate innovation in DeFi by providing access to secure infrastructure for liquidity applications. As a core building block of DeFi, Balancer Protocol is community driven and is reliable, open-source, and permissionless. Projects build on Balancer to create new, innovative types of pools and financial dApps. Visit balancer.fi to learn more.
Communications from Balancer are intended solely for informational purposes, and should not be construed as investment or trading advice and are not meant to be a solicitation or recommendation to buy, sell, or hold any digital assets mentioned. All figures are estimated and unaudited unless otherwise noted. Past performance is not necessarily indicative of future results. Transactions on blockchains are speculative. Carefully consider and accept all risks including risk of loss of all funds and extreme volatility of token prices and liquidity before taking action.