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Up 80% in 24 Hours: What Is Behind Tranchess' (CHESS) Recent Spike?

Wed, 05/25/2022 - 10:11
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Gamza Khanzadaev
Binance-backed project was dangling at the bottom, but then it burst
Up 80% in 24 Hours: What Is Behind Tranchess' (CHESS) Recent Spike?
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CHESS is the governance token of Tranchess project, launched in 2021 with the support of Binance Labs, Three Arrows Capital and Spartan. It spiked up 80% in the last 24 hours. There are no objective or obvious reasons for such rapid growth, but judging by the large-scale volume of token purchases, there should be some serious announcements and integrations expected on other platforms soon.

The token launched on the basis of BNB Chain has lost almost 90% of its value since the beginning of the year, but its fundamental advantages over its competitors in the field of yield enhancing asset tracking have not gone anywhere. The project has remained undervalued for a very long time, and, apparently, when its quotes reached the bottom at $0.22, "smart money" decided to accumulate a big chunk of CHESS.

What is Tranchess (CHESS)?

Let's take a look at what the Tranchess project offers and how it is implemented in DeFi.

The project has three foundations:

  • QUEEN: the main fund, where users have the opportunity to place their BTCB and ETH in farming, getting CHESS tokens and at the same time maintaining the opportunity to win on Bitcoin price growth. The fund's Net Asset Value minus management fees is 100% correlated to the BTC and ETH price. Investors receive QUEEN tokens in exchange for their BTC and ETH. The target audience of the fund is long-term holders, who are interested in a product that allows for higher returns, with no lock-up period. The token is further convertible into two other funds: BISHOP and ROOK.
  • BISHOP: a fixed income fund. Holders of this fund/token provide liquidity to the third fund (ROOK) and thus receive interest on a daily basis. Similar to bank deposits, BISHOP generates returns regardless of ETH or BTC price spikes. The variable rate each week is BORROW from Venus, and a vote by CHESS holders decides what premium to add to that rate.
  • ROOK, in fact, is an investment in BTC or ETH with leverage. The peculiarity of the product is the absence of forced liquidation - this is an innovation in the world of DeFi. Investors take a "loan" from BISHOP investors, then invest in the main fund (QUEEN). At the exit, investors make a profit (or loss) of the main fund, QUEEN, minus interest, which is paid to BISHOP holders.

The total value locked, according to the official Tranchess site and DefiLlama estimates, is about $265 million. It seems that a market cap of $18 million was too little for such an asset.

Perhaps it is in this field that we should look for the causes for such a rapid rise in the price of CHESS in the last 24 hours and more systematic growth in the last two weeks.

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About the author

Financial analyst, trader and crypto enthusiast.

Gamza graduated with a degree in finance and credit with a specialization in securities and financial derivatives. He then also completed a master's program in banking and asset management.

He wants to have a hand in covering economic and fintech topics, as well as educate more people about cryptocurrencies and blockchain.