Flying Tulip is a full-stack on-chain decentralized finance (DeFi) protocol founded by developer Andre Cronje. The project is designed as an integrated financial marketplace that combines spot trading, derivatives, lending, a native stablecoin, and on-chain insurance into a single, capital-efficient, cross-margin system. ^{[1] [2]}

Overview

Flying Tulip aims to address issues of capital efficiency and fragmented liquidity prevalent in the DeFi sector by unifying multiple financial primitives within one ecosystem. The project's architecture is built upon the conceptual framework of Deriswap, a protocol first proposed by Andre Cronje in 2020, which sought to merge swaps, options, futures, and loans into a single platform. The core of the platform is a cross-margin system that allows users to leverage their assets across various activities, such as trading and lending, without needing to move capital between separate protocols. ^[3]

A central tenet of the project is a novel approach to capital management and investor protection. Unlike many projects that spend raised funds on development and operations, Flying Tulip intends to deploy its entire capital pool into established, on-chain yield-generating strategies. The yield earned from this capital is then used to fund the project's growth, ecosystem incentives, and token buybacks. This model is coupled with an "onchain redemption right," a mechanism that allows investors to redeem their tokens for their original principal at any time, providing significant downside protection. The project's stated goal is to create a sustainable, self-reinforcing growth model where protocol revenue drives value back to the ecosystem and its token holders. ^{[4] [1]}

In a statement about the project's scope, founder Andre Cronje noted, "It isn't 'a DEX.' It's a ground-up rebuild of lending, trading, AMM [automated market maker], CLOB [central limit order book], derivatives, insurance, and stablecoins, each with their own unique innovations." ^[1]

History

The conceptual foundation for Flying Tulip dates back to 2020, when Andre Cronje introduced the idea of Deriswap, a protocol designed to combine multiple DeFi services into a single, capital-efficient contract. This concept served as the precursor to the more comprehensive vision of Flying Tulip. ^[3]

The project began its private seed funding round on August 14, 2025, and successfully closed the round within a month, raising $200 million. On September 29, 2025, the project was publicly announced, revealing details of its funding, core features, and plans for a subsequent public token sale. The announcement confirmed the project's $1 billion fully diluted valuation and its intention to launch initially on the Sonic network before expanding to other blockchains. ^{[1] [5]}

Technology and Features

Flying Tulip is architected as an integrated ecosystem of financial products that operate cohesively rather than as standalone services. The platform's components are linked through a single cross-margin system designed to maximize capital efficiency for users. ^[6]

Core Architecture

The platform's design unifies several key DeFi services:

• Spot Trading: For direct asset-to-asset exchange.
• Derivatives: Including perpetual futures and options.
• Lending: A money market for borrowing and lending assets.
• Native Stablecoin: The ftUSD stablecoin, which is central to the ecosystem.
• On-chain Insurance: To provide risk transfer and mitigation products.

This integrated structure allows collateral deposited for one activity, such as lending, to be simultaneously used to margin positions in the derivatives market, reducing the total capital a user needs to lock within the ecosystem. ^[2]

ftUSD Stablecoin

The ftUSD is a yield-bearing, decentralized stablecoin pegged to the U.S. dollar that serves as a foundational component of the Flying Tulip ecosystem. It is designed as a delta-neutral stablecoin, meaning its backing strategy is hedged to mitigate price volatility from the underlying collateral. The stablecoin automatically generates yield for its holders, with a target APY of 8-12%. This yield is produced by deploying user deposits across a variety of on-chain strategies, including lending, staking, and capturing funding rates, all of which are managed on-chain and are publicly auditable. The design aims to eliminate the risk of margin calls and cascading liquidations often associated with other stablecoin models. ^[6]

Lending Market

The protocol features a money market with a dynamic risk management model. Instead of relying on static, predetermined asset lists and parameters, the lending market assesses risk based on real-time market conditions, including observed volatility and price impact. Key features include:

• Slippage-Aware LTV: Loan-to-Value (LTV) ratios, borrow caps, and health factors are dynamically adjusted based on the potential slippage that would occur if a position needed to be liquidated during periods of market stress.
• Same-Asset Debt: The market allows users to borrow the same asset that they provide as collateral. This feature is specifically designed to facilitate delta-neutral strategies for perpetuals and structured products. ^[6]

Trading Exchange

Flying Tulip employs a hybrid liquidity model for its trading exchange, combining a "volatility-aware" Automated Market Maker (AMM) with a Central Limit Order Book (CLOB). This dual structure allows the protocol to route trades to the venue offering the best execution price, optimizing for lower slippage and better rates for traders. For leverage trading, borrow limits are updated dynamically based on price impact and market volatility, enabling higher leverage during calm market conditions and automatically reducing risk when volatility increases. The platform also aims to simplify user onboarding through account abstraction and gas subsidies. ^[6]

Perpetual Futures

The perpetuals exchange is designed to operate without reliance on external price oracles. The protocol uses pricing data generated from its own internal spot exchange for marking and settlement. This oracle-less design is intended to create a more robust and self-contained system, reducing dependencies on third-party data feeds that can be potential points of failure or manipulation. The core principle is that the internal settlement data itself constitutes the price. ^[6]

Capital Management and Investor Protection

Flying Tulip introduces a distinct model for managing its treasury and protecting its investors, which deviates significantly from typical crypto project financing.

Onchain Redemption Right

A core feature of the project is the "onchain redemption right," also described as a "perpetual put option." This mechanism grants any investor who participated in the primary token sales (both private and public) the right to burn their FT tokens at any time to redeem their original principal investment. For example, an investor who contributed ETH to purchase FT can redeem their tokens to reclaim the equivalent amount of ETH. ^[4]

This redemption is settled programmatically from a segregated, on-chain reserve funded by the capital raised during the token sales. The process is managed by audited smart contracts that include safety features such as queues and rate-limiting mechanisms to ensure the protocol's solvency and prevent abuse. If the reserve is temporarily unable to meet all redemption requests, the requests are placed in a transparent on-chain queue and are fulfilled as the reserve is replenished by protocol revenue. This mechanism is designed to provide investors with a strong floor price for their investment, protecting their downside while preserving unlimited upside potential. ^[5]

Capital Deployment Strategy

The capital raised from the token sales, projected to be up to $1 billion, will not be spent on operational costs. Instead, the entire fund is to be deployed into established, on-chain yield-generating strategies through protocols such as Aave, Ethena, and Spark. The project targets an annual yield of approximately 4% on this capital, which would generate around $40 million per year based on a $1 billion treasury. This recurring yield is the sole source of funding for the project's development, operations, ecosystem incentives, and token buybacks. This strategy ensures that the principal investment remains intact and accessible for redemptions. ^[3]

Tokenomics ($FT Token)

The native token of the Flying Tulip protocol is FT. Its tokenomics are designed to align the incentives of the team, investors, and users with the long-term success of the platform.

Supply and Value Accrual

The FT token has a fixed supply cap of 10 billion. The supply model is designed with zero inflation. The primary mechanism for value accrual is a constant buyback and burn program. All sources of yield and revenue generated by the protocol—including trading fees, lending fees, liquidation fees, and yield from the ftUSD stablecoin—are used to buy back FT tokens from the open market. These bought-back tokens are then burned, permanently reducing the total supply and increasing the token's scarcity. ^[6]

Team Allocation and Incentives

In a departure from industry norms, the founding team of Flying Tulip receives no initial allocation of FT tokens. Instead, the team's compensation and financial exposure to the project are tied directly to its performance. A portion of the protocol's revenue is used to fund open-market buybacks of the FT token according to a publicly disclosed schedule. These tokens are then distributed to the team. This model is intended to ensure that the team's incentives are directly aligned with generating real-world usage and sustainable revenue from the protocol's launch. ^[4]

Token Transferability

To prevent immediate arbitrage of the redemption mechanism, FT tokens will remain non-transferable until the conclusion of the planned public sale. This restriction is designed to mitigate the risk of participants buying tokens on a secondary market at a discount and immediately redeeming them for the principal value from the on-chain reserve. ^[5]

Funding

Flying Tulip's funding strategy involves two phases: a private seed round followed by a public sale, with a total fundraising target of up to $1 billion.

Private Seed Round

In September 2025, Flying Tulip announced the completion of a $200 million private seed round at a $1 billion fully diluted valuation. The round was structured as a Simple Agreement for Future Tokens (SAFT) and did not have a single lead investor. The round saw participation from a wide range of institutional backers, including:

• Brevan Howard Digital
• CoinFund
• DWF Labs
• FalconX
• Hypersphere
• Lemniscap
• Nascent
• Republic Digital
• Selini
• Sigil Fund
• Susquehanna Crypto
• Tioga Capital
• Virtuals Protocol

This list reflects the investors mentioned across multiple reports on the funding round. ^{[1] [4]}

Planned Public Sale

Following the private round, the project announced plans to hold a public sale to raise up to an additional $800 million. The public sale will be offered at the same $1 billion valuation as the private round, a move intended to provide equitable terms for all participants. The sale will be conducted on Flying Tulip's own proprietary platform across several blockchain networks. ^[3]

Team

Flying Tulip was founded by Andre Cronje, a prominent developer in the DeFi space known for creating Yearn Finance (YFI) and his work with the Fantom ecosystem and the Sonic Foundation. As of September 2025, the team consists of approximately 15 globally distributed members located in the U.S., Europe, and Asia. The project is actively hiring to expand its team. ^[1]

Launch Plan and Blockchain Support

The protocol is planned for a multi-chain deployment. The blockchains slated for support at launch include:

• Ethereum
• Avalanche
• BNB Chain
• Sonic
• Solana

The initial rollout strategy involves first launching and "hardening" the platform on the Sonic network. This approach is intended to leverage Sonic's infrastructure, including its fee monetization and subsidy features, which will allow Flying Tulip to offer zero-fee trading during its initial phase. Following this period, the full suite of services will be deployed to the other supported chains. ^[1]