Tranchess launches qETH for non-custodial liquid staking on Ethereum

Quick Take

  • The failure of centralized crypto firms like FTX and companies exposed highlights the need for decentralized institutions, according to Tranchess CEO and Founder Danny Choy, who said the company will launch a decentralized liquid staking protocol on Ethereum.
  • Tranchess is a leading validator in the BNB ecosystem with just over $45 million in total value locked on the platform. 

Tranchess, a liquid staking provider for the BNB ecosystem, will expand liquid staking on Ethereum with the launch of a non-custodial staking service and the qETH token.

A majority of leading liquid staking protocols on the Ethereum network come from centralized sources. In the wake of the collapse of centralized service providers such as FTX and those companies caught up in the backlash, decentralized approaches are becoming a greater necessity, Tranchess CEO and co-founder Danny Chong told The Block in an interview.

“We didn't really want to be a centralized entity,” Chong said, adding that the company is working with node operators it can trust for technical execution. Offering a decentralized alternative to major competitive staking services like Lido, Tranchess provides a 4% return on staked ETH, according to its website.

A market has grown around liquid staking protocols in the absence of an exact date slated for the Shanghai upgrade on Ethereum. The upgrade would allow users to withdraw their staked ETH. The protocols allow users to stake tokens. In turn they would receive a token of equivalent value — such as qETH— that serves as a redeemable receipt, usable as collateral with participating DeFi platforms.

Bringing with it lessons learned validating on BNB Chain, the Tranchess team took time to ensure its deployment on Ethereum would be seamless, according to Chong. The company today has just over $45 million in total value locked, which it hopes to grow by branching into the Ethereum liquid staking ecosystem.

“DeFi is now back into the limelight especially in the lights of liquid staking,” Chong said. “The yields in terms of returns are stable and people know exactly where it comes from, which is from gas fees.”

On the difficult topic of centralization on Ethereum and censorship, Chong admitted that the team doesn’t have the perfect solution.”It's a topic that was widely discussed within the team.” 

The Tranchess team recently met with Ethereum founder Vitalik Buterin in Singapore, who advocated the integration of zero knowledge proof protocols that allow for transactional verification and user privacy. The team is now looking into this.

The approach encouraged by Buterin appeals to Tranchess, according to Chong, who noted, “You do not have to reveal every single part of yourselves or information just because you need to prove who you are, what you do. I think that doesn't really make sense.”

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