3AC-backed DeFi protocol Tranchess launched to track Bitcoin performance

Three Arrows Capital CEO Su Zhu has announced the launch of decentralized finance (DeFi) protocol Tranchess.

Tweeting on Thursday, Zhu described Tranchess as a “Tokenized Asset Management & Derivatives Trading protocol.”

While the project aims to become a multi-chain and multi-asset DeFi protocol, with designs on becoming a decentralized autonomous organization, the first iteration of Tranchess focuses on Bitcoin (BTC).

Tranchess 1.0 offers access to a BTC price performance tracker on a correlated basis. Since the project’s initial launch is on the Binance Smart Chain, users will need to have BTCB — the BEP-2 version of Bitcoin.

According to the project’s white paper, users swap BTCB in exchange for QUEEN — the main native token. Alternatively, investors can acquire QUEEN with USD Coin (USDC) on supported exchanges.

Ownership of the QUEEN token enables users to get involved in the protocol sub-fund or tranche. Keeping with the chess theme, the sub-funds are dubbed BISHOP and ROOK. Investors need only split their QUEEN tokens into BISHOP and ROOK on a 50-50 basis.

Per Zhu’s tweet, farming on Tranchess allows single-asset staking in a bid to counter impermanent loss. “If you are holding BTC, create the Queen token. If you are holding USDC, create the Bishop token,” the 3AC chief added in the Twitter thread.

Apart from farming, there is also the option of entering a leveraged long position on Bitcoin via the ROOK token. However, as pointed out by Zhu, “There’s no forced liquidation nor funding cost spike.”

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Where swapping BTCB for QUEEN is dubbed the “creation” step, Tranchess users can also go in the other direction by exchanging their QUEEN tokens for BEP-2 Bitcoin — the “redemption” step. Before doing this, the user will have to merge the BISHOP and ROOK tokens back to a whole QUEEN “coin.”

Back in July, Tranchess secured $1.5 million in seed funding from notable backers, such as 3AC, Spartan Group, IMO Ventures, LongHash Ventures and Binance Labs.