Danny Chong on Tranchess portfolio management and DeFi platform

0:01I'm Ashin Adison from Blockware Capital for Investment Pitch Media and the Crypto Coin Show. And today on Blockchain Interviews with Danny Chong, co-founder of Tranches. Danny, welcome to the show and thank you for taking the time out of your busy schedule to come on to the show and speak with us today. Hey, pleasure Ashton. Happy to be here and speaking to everyone.

0:22Likewise. Let's dive straight into it because there's a lot to talk about. Your team is working on a lot. Let's just kick off the conversation with a little bit about yourself, how you got into blockchain, and how that led to co-founding Tranches. Okay, so maybe just to start off with, you know, like Tranches in a brief sentence, it's basically a

0:45structured asset tracking protocol with varied risk returns for users of different risk appetites. As for me, you know, like how I come to DeFi, maybe just just go back in history a bit, you know, like I have 16, 17 years of experience in investment banking on global market side. So, I was involved with trading, with sales, with structuring. Basically, what happens on global

1:11markets. And I was leading a team for Asia Pacific on mainly FX and also emerging markets. So, that's a bit about me before I step onto the world of DeFi. Now, I think coming from an investment background there are always a lot of so-called things we think are innovative and especially on the space of

1:37structured products, we've always been coming up with new, attractive, and basically useful stuff for retail, corporate, or financial institutions to come in and basically make use of those products to be able to engage the markets a bit better. Now, in the world of DeFi, it all started with a very brief chat with friends. With a couple of

2:02co-founders, with my CTO, and we were thinking of like, "Oh, you know, like, what can we do differently?" And that's when DeFi actually first started off. And what we really wanted to do is to take the best of what we know in traditional finance and to bring it into DeFi. So, the team that currently I'm I'm working with, right, including the C-suites and also the tech

2:26people, well, I think first of all to mention the tech people, they come from Microsoft, Google, Facebook, and so on. And on the on the C-suites side, more than half of them comes from investment banks, hedge funds, roles in asset managers, asset managers and so on. So, basically, we are kind of a very good combination of both tech as well as a financial

2:50background. Now, what actually the truth is that we've been discussing about this stuff, we basically were already ourselves users of the DeFi world. And some of the stuff that we were a bit intrigued, or, you know, like, we're trying to or rather trying to solve at the end was the fact that, you know, yields were actually plummeting.

3:14Basically, there were impermanent impermanent losses coming from being engaged in pools with two assets or more. And also like a, you know, sometimes you get into one thing to do leverage products, but liquidation is always an issue. Now, with all this in mind, and I mentioned earlier that we're trying to bring a paradigm shift of what is DeFi with expertise and

3:38also knowledge from TradFi. And that kind of like gave birth to Tranchess. Very cool. Thank you for all that background. That brings a lot of light, and it's great to hear about the expertise of your team as well, merging TradFi with DeFi as more institutions and more traditional finance becomes aware that this is the future of finance.

4:03And you mentioned a couple different scenarios in using DeFi products and sounds like you truly went through the entrepreneur's journey where you were using DeFi and you're like, you know what? This is a mess. DeFi's everywhere, it's on every different blockchain. How do you manage it all? And I think that's sort of where Tranchess comes in handy.

4:23Maybe you can elaborate a little bit more on who is using the product. And because you mentioned there a bunch of different types of users like personal but also institutional and your your team is coming from there. Is it catered towards people that are in crypto as well as non-crypto users or are there technical barriers to entry? I think that's a great question and it's

4:49one of the favorite question for me to address. I think first of all to look at Tranchess product. I think we have an idea of like what are the pain points of DeFi and also we want to provide something that is appealing or something that will also be understood by the world of TradFi. So we actually come up with Tranchess also catering to I mentioned earlier before users of

5:15different risk appetites. Now now first of all maybe I'll give a introduction to the tokens within Tranchess that you need to know and it helps me to explain kind of like why they cater to different risk appetites. So first of all there will be the Queen token that is kind of a tracking an underlying one is to one or close to one is to one minus fees. And Queen can be split into

5:43Bishop, 0.5 Bishop and 0.5 Rook. So Bishop itself is like a USDC stablecoin type of token, which means it has no market risk. And rook will be our leverage token, which is close to a two times leverage or two times asset tracking. 0.5 of zero delta plus 0.5 of 2x delta, it actually equivalent to queen. Now, for

6:12more fun fact, you know, also, you know, like queen in international chess moves in omnidirectional, right? Up, down, left, right, diagonal. Bishop only moves diagonal. And rook only moves vertically, horizontally. And if you add them up, they are equivalent to queen. So, in this very kind of equal primary ecosystem that we have built, in fact, it's

6:39something that's quite unique on Tron Chess. Users of different types of nature will be able to make use of this setup. Now, if you're just someone who is new to crypto or even new to DeFi, what you want to do is maybe to maybe hold stablecoin just just just try your hand at it, then you'll be obviously engaging in bishop, where you have yield between 20 to 40%

7:06at Tron Chess APY. And then you can just keep it there and earn interest since you want to figure a bit more about how the world of crypto works. But you could also be, you know, like changing bit BTC, ETH, or currently our newest fund BNB into queen. And then you can be tracking the underlying on a cost of a one-to-one basis. And you'll still be getting attractive yield

7:31between 15 to maybe 40% if you're if you're staking BNB. And of course, for the sophisticated player or someone who's already very used to leverage, you can always engage with rook where is around two times leverage. So for now, a lot of people are saying that we have finally beat the bottom and it's time to engage in coin purchasing and maybe that's how you'll be able to leverage on

7:57rook. Okay? So basically it's a you know like that different personalities, different kind of risk appetite will be able to make use of this. Now on the that's on an individual basis and sophisticated investors but even an FI right would find this very useful because it's an ecosystem that you would be able to manage across the few tokens to give you

8:20an advantage in managing different kind of market direction or market trough or peak. So in that sense if it's at the highest point, you were holding queen, you could be selling off queen and basically revert to holding bishop and when the market actually goes lower, you will be able to exchange your bishop in our swap market into USDC and maybe get it

8:44into queen or get it into rook to be able to enjoy the upward movement while still getting of course attractive you at the same time. So being in the ecosystem simply allows you to be managing your risk but at the same time allowing you to be producing attractive you year after year. Mhm. Yeah, it's great to hear that there's there's flexibility and

9:10different routes that different investors can take or traders depending on their risk appetite and what kind of Exactly. And you mentioned there a couple different assets and you mentioned BNB and I know that DeFi is really spread across all these different blockchains and it's a little bit of a mess if you're trying to use all of them and some of them work better than others

9:33and from what I understand Tranches is mainly utilizing Binance Smart Chain for the technology. Maybe you can talk a little bit about that and why it's optimal for the platform to be using this technology. Well, when we were starting, right? I mean, it was a it was a discussion within the team which blockchain should we actually embark on.

10:01Truth is, we all know Ethereum is the biggest TVL and kind of like the number one out there. So, definitely we had our sights set on Ethereum. But, it was also a fact that the gas fees were massively huge. And kind of like we were wondering whether it makes sense for our users to be constantly you know, like paying high

10:28gas fees and so on. And it's true that we also came to realize that Binance Smart Chain was also pretty robust in terms of its own network. And I think the support overall where we understand from fellow protocols that it's all kind of reliable. I mean, definitely they have very very little down downtimes that at least we've seen so far. And

10:52coming into it, I guess some of the stuff that became more apparent is that the chain itself has very attractive programs. So, we were lucky enough to be awarded kind of like a most valuable builder in August. Which is a good recognition for protocol starting out there. We started in June last year and we were able to get August. I guess that was a kind of

11:18like a very positive recognition for me, my team, and also the community, right? To say that, "Oh, you know, like we must be doing something right. We're going to keep doing our best to try and make it work." and thereafter we were also given a hall of fame kind of status. And that gave us increasing kind of like a motivation and trying to do

11:43better. I mean I mean this could be seen like just like kind of Grammy Awards and stuff like that but I think what also on top of this they actually give real help in terms of connectivity. So we were given a lot of introduction and also like basically linked up with senior protocols who actually shared very openly of their success and their

12:08failures. And not to mention there are also a lot of programs that's actually helping protocol to develop better. Example, we were given like a priority one kind of engagement which is basically BSC giving other protocol extra protection with Immunify on top of what they have. So for example

12:35if we are covered 200k in terms of bug bounty with Immunify, they will be actually on the other side giving another two times of coverage for you. Meaning to say that white hackers will be more engaged to actually help you protect the protocol. There were also like a lot other liquidity pool kind of like subsidies there were also a lot other rewards that

13:02I think really helps protocol move ahead. That's actually kind of like a post hindsight of like what we realized it was good but I think the previous point we made about like it being low gas fees with a robust support structure and it's being efficient and never I mean it does become but very seldom is what that keeps us going currently

13:29with BSC. Mhm. Yeah, that's great background and congratulations on such quick success. I know DeFi moves quickly and the team has to move quickly to keep up. And it's going to continue throughout 2022 and for years to come, just keep re-innovating Thank you. as more capital comes in, it's going to move faster. So, I want to shift the conversation to looking forward a little

13:52bit. Yeah. What's up the sleeve for Trenches for 2022? Any big plans or hints at the road map and what you can release in the next 6 months as you continue to grow? Oh, sure. So, something about Trenches, I think you know, continuous innovation is something that we pride ourselves for and it's also what we set our sights on. So,

14:17you're going to see more of that from us. Not to mention, currently, we are actually with intro- we just introduced our new new new fund recently, which is the BNB fund. And at actually, that is unique because it is not just pure emission of our native token, Chest, but it comes with it comes with itself an extra alpha coming from the fact that is a we have

14:42validator staking on BSC. So, what this means is that physical work is being done from our side by putting users BNB onto a validator node basically producing helping BSC basically decentralize the network. And in return, we get a yield. And so, that yield basically is generated in the form of BNB and that's a yield on top of the native

15:10whichever base currency that you're putting it. So, my point being is that this is the first step that we have successfully moved from our native token emission to basically gaining alpha or attractive returns. Which means to say also we are getting protocol income in a different format for TronChess. Now, by being a our being a validator kind of a setup

15:38with BSC allows us also to have the possibility of moving cross-chain now to other blockchain networks and basically maybe reproducing this methodology of gaining alpha from the other network. I mean, you should know I don't know others I'm not going to mention it, but what other than this of a moving cross-chain and also maybe introducing

16:07our validator stickers over over all these different blockchain network, we are also obviously coming up with a new structured fund that we are not going to be able to review much, but what we are looking at is we know the fact that there is a demand for stable tokens. So, we are trying to figure out expansion of what Bishop our stablecoin is having

16:34into into something that is going to benefit users of TronChess in a different way. We also I didn't mention earlier on, but obviously in TronChess there is a swap as well. Currently, the swap is being used already increasingly, but we hope that we also the new fund setup we are going to be increasing the liquidity for swap as well as a

17:01overall kind of like demand for ROOBEE and Bishop increasingly. Mhm. Amazing. Yeah. Yeah, a lot of plans in the works. I think it's going to be a big year ahead. And I'm excited to follow along as you continue to grow out with the team. For the viewers that are looking to follow along with these updates, use the swaps, you know, start staking, do

17:28all of these functions, and just learn more about TronCase, what's the best way for them to get involved and to get involved with the community? Well, you know, like it's a very interesting question as well. Well, you know, like with traditional finance, right? Everyone would just tell you, "Oh, go talk to your relationship manager. Go look at the website." Or,

17:48you know, like just go and look at the docs. So, you know, like for sure, in TronCase, you can definitely look at our documents, and there will be very detailed kind of explanation for you. You can also obviously go into our FAQ, where we try to imagine or we have already did our rounds of like speaking to some of our community and what

18:11questions they might have and putting it there so that it's kind of like a easy bite-size for you. We have also prepared medium articles that is like a quick fact sheet about TronCase, and you can just go in there and boom boom boom boom boom get get the highlight of who are seed investors, what we do, who are the key person inside TronCase, and

18:33so on. You can definitely get it from medium. We have also across I guess Telegram chat, Twitter, and also Discord. And actually, we are looking at also another medium to introduce more connectivity and also more data sharing or information sharing in that way. But that's kind of like a work in progress.

18:59Yeah, so if anything, you know, like you just want to have questions, just just go to Telegram group. You know, look for TronCase, and basically go in and ask your first questions. No no question is too simple. No question is you know, too difficult. If you have anything you want to know, just just ask. I think in the world of DeFi,

19:22that's how we are unique, right? People start by asking questions and it does not necessarily have to be the official Tranchess group or moderators that reply you. Anyone in the community will be able to help you and basically help you with questions. Very cool, and I appreciate all those links. I will use them as well in the description box below for the viewers.

19:43Thank you, Danny, for coming on to speak about Tranchess. All the best with everything that we've spoken about, and let's follow up in the near future. Thank you, Ashton. I'm wishing you a great year ahead.