Website

Rebalance

What is Rebalance?

Rebalance is the action of resetting the Fair Values of Token BISHOP and ROOK back to 1. The amount of under each address might also change to reflect the adjustment. Rebalance is triggered when FairValueRook/FairValueBishopFairValue_{Rook} / FairValue_{Bishop} is below 0.5 or over 2.

Will the Rebalance of one underlying asset affect the others?

No. BTCB, ETH and BNB are three separate funds. Although they follow similar mechanism, the NAVs of bQ/B/R, eQ/B/R and nQ/B/R are calculated separately, so is the Rebalance.

Why Rebalance?

Rebalance is designed for the following reasons:

  • During extreme events when market drops drastically, the earnings of BISHOP might be threatened. To protect the earning of BISHOP, Rebalance is triggered.

  • During extreme events when market drops drastically, ROOK's Fair Value would experience an expedited drop as the leverage ratio increases sharply. To stop the sharp depreciation of ROOK and restore the proper leverage ratio, Rebalance is triggered.

  • When the market price of the underlying asset rises, the leverage ratio of ROOK decreases. To restore a proper leverage rate for ROOK, Rebalance is triggered.

Does Rebalance happen immediately after the Fair Value ratio hits the thresholds?

No. Rebalance happens only during daily settlement time. That is to say, if the Fair Value ratio hit the thresholds during the day but was within the range of 0.5~2 when the protocol conducted daily settlement, there will be no Rebalance.

How exactly would my token amounts change?

The calculation below applies to both Tranchess on BNB Chain and Tranchess on Ethereum.

When FairValueROOK/FairValueBISHOP>2FairValue_{ROOK}/FairValue_{BISHOP} >2

After Rebalance:

  • Fair Values of BISHOP and ROOK are readjusted back to 1.

  • Fair Value of QUEEN remains unchanged. QUEEN holders would not be affected by Rebalance.

  • BISHOP holders would receive extra QUEEN tokens to ensure their total asset value is the same as pre-Rebalance.

  • ROOK holders would receive extra QUEEN tokens to ensure their total asset value is the same as pre-Rebalance.

  • For LP token holders, the BISHOPs in their LP tokens go through the same Rebalance process as individual BISHOP tokens, and thus, LP holders would also receive extra QUEEN tokens.

  • Fair Value of BISHOP-BUSD post-Rebalance = (BISHOP Balance + BUSD Balance)/Total LP Amount. Therefore, the post-Rebalance Fair Value of LP might not be exactly 1.

Specifically:

The extra amount of QUEEN token BISHOP holders would receive is:

QUEENAmount=[(BISHOPFairValuePreāˆ’Rebalanceāˆ’1)/SplitRatiopostāˆ’Rebalance/2]āˆ—BISHOPAmountQUEEN_{Amount} =[ \big( BISHOP_{FairValuePre-Rebalance}-1 \big)/ SplitRatio_{post-Rebalance} /2 ]* BISHOP_{Amount}

The extra amount of QUEEN token ROOK holders would receive is:

QUEENAmount=[(ROOKFairValuePreāˆ’Rebalanceāˆ’1)/SplitRatiopostāˆ’Rebalance/2]āˆ—ROOKAmountQUEEN_{Amount} =[ \big( ROOK_{FairValuePre-Rebalance}-1 \big)/ SplitRatio_{post-Rebalance} /2 ]* ROOK_{Amount}

The extra amount of QUEEN token LP holders would receive is:

QUEENAmount=[(BISHOPFairValuePreāˆ’Rebalanceāˆ’1)/SplitRatiopostāˆ’Rebalance/2]āˆ—LPAmountāˆ—RatioBISHOP/LPQUEEN_{Amount} =[ \big( BISHOP_{FairValuePre-Rebalance}-1 \big)/ SplitRatio_{post-Rebalance} /2 ]* LP_{Amount} *Ratio_{BISHOP/LP}

QUEEN tokens are not affected by Rebalance. Similarly, nQUEEN-BNB LP tokens holders would not be affected by Rebalance.

When FairValueROOK/FairValueBISHOP<0.5FairValue_{ROOK}/FairValue_{BISHOP} <0.5ā€‹

After Rebalance:

  • Fair Values of BISHOP and ROOK are readjusted back to 1.

  • Fair Value of QUEEN remains unchanged. QUEEN holders would not be affected by Rebalance.

  • BISHOP holders will see a decrease in the amount of BISHOP tokens they have. Meanwhile, they would receive extra QUEEN tokens to ensure their total asset value is the same as pre-Rebalance.

  • ROOK holders will see a decrease in the amount of ROOK tokens they have. The total value of ROOK tokens remains the same as pre-Rebalance.

  • For LP token holders:

    1. BISHOPs in their LP tokens go through the same Rebalance process as individual BISHOP tokens, and thus receives extra QUEEN.

    2. The QUEEN tokens would be automatically split into BISHOP and ROOK.

    3. ROOK tokens are distributed to all LP holders.

    4. BISHOP tokens are put back into the AMM pool.

    5. If after the extra BISHOPs were put into the AMM pool, the total BISHOP balance in the pool was less than its pre-Rebalance amount, the protocol would extract excess BUSDs from the pool and distribute to all LP holders proportionally.

    6. After Rebalance, LP holders are likely to receive both extra ROOK and extra BUSDs.

  • Fair Value of BISHOP-BUSD post-Rebalance = (BISHOP Balance + BUSD Balance)/Total LP Amount. Therefore, the post-Rebalance Fair Value of LP would be less than 1.

Specifically:

The amount of ROOK tokens after Rebalance is:

ROOKAmount=max{FairValueROOKpreāˆ’rebalance,0}āˆ—ROOKAmountPreāˆ’RebalanceROOK_{Amount} =max \big\{ FairValueROOK_{pre-rebalance},0 \big\} * ROOK_{AmountPre-Rebalance}

The amount of BISHOP tokens after Rebalance is:

BISHOPAmount=max{FairValueROOKpreāˆ’rebalance,0}āˆ—BISHOPAmountPreāˆ’RebalanceBISHOP_{Amount} =max \big\{ FairValueROOK_{pre-rebalance},0 \big\} * BISHOP_{AmountPre-Rebalance}

This is not a typo: in this scenario, we also refer to the pre-Rebalance fair value of ROOK when calculating BISHOP's post-rebalance amount.

The amount of extra QUEEN tokens BISHOP holders would receive is:

[(FairValueBISHOPpreāˆ’Rebalance+FairValueROOKpreāˆ’Rebalance)/2āˆ’max{FairValueROOKpreāˆ’Rebalance,0}]/SplitRatiopostāˆ’Rebalanceāˆ—BISHOPAmountPreāˆ’Rebalance [\big( FairValueBISHOP_{pre-Rebalance} + FairValueROOK_{pre-Rebalance} \big) / 2- max\big\{ FairValueROOK_{pre-Rebalance} ,0\big\}]/ SplitRatio_{post-Rebalance}* BISHOP_{AmountPre-Rebalance}

For LP tokens:

  • The amount of extra ROOK follows the same logic as the QUEEN calculation above because ROOK is the result of spliting the extra QUEEN.

  • The amount of extra BUSD contains both the provided BUSD liquidity and trading fees in the pool. BUSDs are distributed proportionally to all LP holders. If users want to know how much their LP holdings account for in the entire pool, they can obtain the total LP amount by reading "totalSupply" under the contract "LiquidityGauge" through BSCScan. All contract addresses can be found under Contracts

Will Rebalance change the amount of CHESS tokens in my account?

No. The CHESS tokens in your wallet will not be affected by Rebalance.

When can I transfer my QUEEN, BISHOP and ROOK tokens between addresses after Rebalance?

Users can transfer their QUEEN tokens immediately after Rebalance. BISHOP and ROOK tokens will be transferable 30 minutes after Rebalance.

When will Tranchess functions resume after Rebalance?

All functions are running as normal immediately after Rebalance in Tranchess V2, including staking/unstaking, AMM swapping and so on.

Can I transfer my CHESS tokens between wallets during Rebalance?

Yes.

If all functions are working as normal right after Rebalance, why do I have to wait for 30 minutes for BISHOP and ROOK transfer?

In Tranchess V2's fund contracts, there's a parameter called activityDelayTimeAfterRebalance, which is set to 1800 seconds. This parameter is there mainly for one particular scenario: if a user would like to transfer BISHOP and ROOK from his/her WALLET address.

As we all know, for all on chain transactions there's always a gap between a user sending out a transaction request and the request finally got confirmed on chain. The waiting time could be very short or very long, depending on how congested the chain is at the time. If a user sent out a transfer request(from a wallet address) before Rebalance and the request was confirmed post-rebalance, the final transferred amount is likely to be different from the desired amount when the request was initially sent. In order to protect our users from such trouble, we set the activityDelayTimeAfterRebalance to 30 minutes so that, if a transfer request was sent out pre-rebalance and confirmed post-rebalance within the 30-minute window, the request would be reverted so users don't receive confusing amount of tokens.

QUEEN token transfers are not limited by the activityDelayTimeAfterRebalance setting. Users can transfer their QUEEN tokens between wallets immediately after Rebalance.

This 1800-second lock is ONLY for BISHOP and ROOK token transfers from wallet addresses, because wallet apps follow typical erc20 standards and there's not much "customized" adjustments we can do to cater the Rebalance design.

In the Fund contract, there are two functions "trancheTransfer" and "trancheTransferFrom" that can also be used to transfer QUEEN, BISHOP or ROOK tokens. These two functions have an additional "version" parameter and make sure its value equals to the number of historical Rebalances. With this additional check, the senario with a standard ERC-20 transfer mentioned above will not happen, and these two functions are not affected by Rebalance. All Tranchess smart contracts use these two functions to transfer QUEEN, BISHOP and ROOK tokens. Therefore, the Tranchess website and all contracts work as normal immediately after Rebalance.

Is there anything I need to do after Rebalance is triggered?

Boosting. Go to the Staking page and enroll again to keep your boosting momentum going.

PreviousTranchess Swap (V1ļ¼‰NextHistory Rebalance Record

Last updated