Rebalance, Recovery and Extreme Market Volatility

Rebalance happens in an event of extreme market drops or pumps. It’s an important preservation mechanism to keep the protocol running, it’s a way for the protocol to keep a perspective of the market and to make sense out of it. So it can continue what it’s been doing by giving weekly BTCB/ETH rebates and daily CHESS rewards.

Rest assured, it does not take away your investments, to understand this, we have to look back at the basic fundamentals of the protocol to avoid FUD, especially during rebalance.

The protocol:

  • Keep track of underlying asset value - Yes, we lose some Q/B/R, in numbers, but not in value, because the NAV keeps track of the underlying assets. The numbers of Q/B/R shrinks during rebalancing, but the NAV keeps track of it. NAV resets to 1, but on market recovery, delta will be added to NAV value. NAV values move as the market moves, so your BTC/ETH investments will be preserved when the market recovers, and most likely a rebalance again will happen when the market pumps to reflect the change.

  • Tracks only stables cryptocurrency - We are tracking only the top 2 cryptos, not the top 30-100. If you invested in stables like BTC/ETH 3 years ago, the value of your investment undoubtedly quadruples because for the reason that they are stables (the top 2 in the world). We are experiencing dips and crashes, which is normal in a highly volatile market. It’s a brutally honest financial system, but it’s a really robust one. Nature taught us that for a frog to jump, it needs momentum, for a bird to fly, it needs to ark back a little. For something to move higher, it needs to push back and gain momentum, same as any market, dips/crashes are necessary to gain momentum by collecting investor power for it to jump/fly higher.

  • Preserves the value of your asset - Value readjusts through QUEEN/ROOK current market value. Bear in mind that rebalance happens not only when the market extremely drops, but also when the market extremely pumps. One thing that we learned is to DON’T SELL negative positions, during market crashes (like we have right now), it is wise to wait for the negative positions to recover, once we recover, Q/B/R also tracks the current price through NAV. if you are fearful, DON’T PANIC, DON’T MOVE your investments, Tranchess is tailored towards long-term investment, continue buying the dips because it’s good to invest during the market crash when others panic.

Lastly, it’s better to invest in CHESS and LOCK it, because it preserves the value of your investments and in the long run, the value of CHESS will increase, and you are forced to HODL, with the benefits of getting weekly BTCB/ETH rebates and daily CHESS rewards as well.