How does the BNB fund work and how is it different from the previous two?
Besides the yield-enhancing single-asset farming feature, BNB fund has an additional Alpha generating layer. The BNB fund stakes all underlying BNBs into Tranchess's validator node on BSC. By being an active validator node on BSC, the staked BNBs earn an APR of 8%~16%, which is distributed back to all nQUEEN+ and nROOK+ holders. (net the protocol fee)
What does "Alpha” mean?
Alpha (α) is a term commonly used in TradFi or investment in general. Simply put, it basically means "active excess return".
Here's a more comprehensive explanation on the term from an external website:
Where does the alpha return come from?
Tranchess will host a validator node on BSC and actively manage the staked BNB level on the node. The goal is to collect a sustainable reward from the BSC network as an active validator. The reward collected from the BSC network becomes the alpha return for Tranchess's BNB Fund.
During the first few days after the BNB fund launched and before the BNBs in the fund were delegated into the validator nodes and started generating APR, where did the Alpha come from?
Tranchess incentivizes all created nQUEEN+ with an 8% Alpha return from its treasury until all the BNBs in the fund are staked into the validator node and the actual alpha starts to appear.
When can I claim my requests for creation and redemption?
Create requests for nQUEEN+ are claimable right after the daily settlement at 14:00 UTC.
The redemption process for nQUEEN+ is a little different from the other two funds. Redemption requests are still settled daily at 14:00 UTC. All settled BNB requests would be claimable as soon as there are “floating” BNBs in the fund, that is, BNBs from other users’ creations, or BNBs from the last undelegated transaction. Whenever there are "floating" BNBs, the settled redemption requests would be claimable immediately. That is, users don't have to wait for another 14:00 UTC. Though Tranchess's website shows an upper limit of 14 days with regards to redemption waiting time, most redemption requests should be claimable in a much shorter time span, as compared to the default seven days based on BSC’s standard “unbonding period”.
After I put in the redemption requests, do I still earn any alpha return?
Users still earn the alpha return until the daily settlement at 14:00 UTC, but the CHESS rewards will stop as soon as users request for redemption.
Do I have to stake the Q/B/R tokens for the alpha return?
Honestly, you don't. Holding nQUEEN+ or nROOK+ is enough for you to collect the alpha return. However, the BNB fund also comes with the single-asset farming feature, and staking Q/B/R tokens gives you extra CHESS on top of the alpha return.
nBISHOP+ does not have the alpha return since it's a stablecoin-like token.
Does the added alpha affect the interest rate nBISHOP receives?
No. nBISHOP+ collects the same level of interest as eBISHOP and bBISHOP.
What exactly will nQUEEN+ earn?
nQUEEN+ receives the following two types of gains:
Validator node rewards in the form of BNB tokens. This is reflected in nQUEEN+'s NAV and will be collected together with users' deposited BNBs when they redeem.
Staking rewards in the form of CHESS tokens. This is Tranchess's own single-asset farming feature which allows users to farm CHESS by staking any or all of their QUEEN/BISHOP/ROOK tokens. The farmed CHESS is reflected in users' accounts under the "Staking" page and can be harvested anytime.
If users locked the CHESS they harvested from staking nQUEEN+, they can enroll their veCHESS for the weekly rebate. By doing so, nQUEEN+ holders will earn the third type of return - the weekly rebate. This will be distributed to enrolled users in the form of BTCB, ETH and BNB tokens.
Is there a CHESS bonus with the launch of the BNB fund?
Yes. For the first five weeks after the BNB fund launches, there would be an additional amount of CHESS distributed to all Tranchess users besides the regular emission. Detailed schedule as below:
The split will stay as 20% BNB until further adjustment
Where does the CHESS bonus come from?
From the "Community Incentives" pool that constitutes 50% of the total CHESS supply.
Why aren't I given an estimated number for nQUEEN+ when creating (like what I would receive when creating eQUEEN or bQUEEN)?
In fact, we use the same formula in the calculation for all three funds. For the exact formula, please refer to this question:
What is the formula used when determining the amount of QUEEN a user can receive when creating?
However, since the BNB fund is an alpha-generating fund that collects validator rewards in the form of BNB from the BSC network every day, the "total BNB amount" used in calculation could be quite different at the time of creation compared to the actual number when requests are settled. We took out the estimated nQUEEN+ figure to avoid possible misunderstandings and confusion.
Is there a place for me to spot the status of the BNB fund?
Yes. Users would be able to see more information about the BNB fund through the BNB Fund Fact Sheet. Here's how you can access it:
Click on "Learn more"
What exactly does each section on the BNB Fund Fact Sheet mean?
Total BNB Deposited: The amount of BNBs that are already enjoying the APR reward through Tranchess's BNB fund by creating nQUEEN+ with their BNBs.
Deposit Cap: Cap of the current BNB fund. (now set at 800k BNB tokens)
Delegation rewards distribution: The distribution split of the staking rewards collected from the BSC network.
Delegation APR: The most recent APR of the Tranchess validator node. This is drawn directly from the BSC network. The calculation is based on the income of the node 2 days ago. It is not compounded and is updated every 24 hours.
Fund Utilization: The % of deposited BNBs that are already staked into the validator node.
Due to potentially frequent creation and redemption requests, the fund utilization rate might not stay at 100%.
For a more comprehensive backstory, check out the medium article below: