Swap and LPs
LP: Points, yield, CHESS incentives and trading fees
Each fund comes with an AMM pool of the Stable token and its underlying asset. Users receive LP tokens by providing liquidity to the pool. The LP token holders collect a basket of yield including four parts:
CHESS rewards: Weekly CHESS emissions decided by weekly governance voting.
Depending on the projects and the nature of the collaboration, some LP pools might receive additional weekly CHESS incentives. Currently, the LPs of STONE Fund 2 receive an additional weekly CHESS incentive of 150,000.
Trading fee: 0.05%. Note: the % shown under “Yield details” beside “Trading fee” is the yield percentage, not the fee itself.
Interest: Partial interest from Stable. Example: If one LP token consists of 0.6 Stable and the Stable has an APR of 6%, the LP token would earn 0.6* 6 = 3.6% interest.
Multiplier of the underlying: In LP, the underlying receives a multiplier of points. The value of the underlying is calculated based on its notional value.
You can add or withdraw liquidity anytime in pairs or single assets.
💡How do Tranchess achieve instant swap for Turbo without a Turbo AMM pool?
Buying Turbo
Tranchess borrows the underlying from the AMM pool. These underlyings, together with the ones users paid, are used in the Primary Market to create QUEEN, which is then split into Stable and Turbo. The Stable is returned to the AMM pool and Turbo to the users.
When most users are swapping for Turbo, Stable could be trading at a discount in the AMM pool.
Selling Turbo
Tranchess borrows Stable from the AMM pool. Combining it with the Turbo that the user is selling, these assets are merged into QUEEN, which is redeemed in the Primary Market for the underlyings. After sending the user their amount of the underlying tokens, the remainder is returned to the AMM pool.
When most users are selling Turbo for the underlying asset, Stable could be trading at a premium in the AMM pool.
Trading Fee Split
0.05%, of which 80% goes to liquidity providers, 10% to treasury, and 10% to veCHESS holders in the form of rebates.
The prices on the website for Turbo and Stable are the current traded prices, which means that for anyone who wants to swap between the underlying asset and Turbo/Stable, this is the price that will be applied to their trades (not taking into account the potential slippage and price impact of the AMM pool).
Turbo and Stable have another set of "pricing systems": the Fair Values. Fair value only calculates the interest earned/paid over time. You will see how much the current traded price deviates from its fair value when you place the order:
When the fund reaches maturity, you will be redeeming your tokens by its fair values and fair values only.
Let's use the STONE fund for example.
With an interest rate of 6%, when the fund ends, each Stable will have a fair value of around 1.03. When Stable is trading at a discount (i.e., its traded price is lower than its current fair value), its actual yield will be higher than 6%. For example:
Assume on day 1, the price of Stable is 0.9 STONE, the actual yield (calculated in simple interest) will be (assume the fund lasts for 180 days exactly):
At any time before the fund is over, Stable's implied yield is:
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