In a significant move for the decentralized finance (DeFi) landscape, Andre Cronje, the founder of Yearn Finance, has successfully raised $200 million in a private seed funding round for his latest venture, Flying Tulip. This substantial investment has led to a fully diluted valuation of $1 billion for the project. Notable investors included Brevan Howard Digital, CoinFund, DWF Labs, and Susquehanna Crypto.
Flying Tulip is poised to enhance the DeFi ecosystem by offering a comprehensive platform that integrates a range of services—spot trading, derivatives, lending, stablecoins, and insurance—into a cohesive user experience. The platform diverges from traditional models by proposing a full-stack onchain exchange, marking a significant evolution from the Deriswap model Cronje introduced in 2020, which aimed to combine various DeFi functionalities in one system.
As part of its development strategy, Flying Tulip plans to raise an additional $800 million through a public sale of its native token, FT, which will be executed on its proprietary platform. While details regarding the launch date and token sale remain under wraps, the project’s ambition to achieve a similar valuation during this public offering underscores its market confidence.
A key feature of Flying Tulip is its innovative “onchain redemption right,” which allows both individual and institutional investors to redeem their FT tokens for their original principal at any time. This mechanism is designed to provide a safety net against potential losses, ensuring that investor funds are utilized solely for onchain strategies, thus mitigating the risk of capital misallocation. Cronje has emphasized that the funds raised will be strategically deployed into platforms like Aave, Ethena, and Spark to yield an estimated annual return of 4%.
Anticipating revenues from these investments, which could generate upwards of $40 million annually, Cronje has outlined plans for the platform’s growth. Initial team members will not receive token allocations but will be compensated based on market buybacks funded by the protocol’s revenue, effectively tying their success to the platform’s performance and aligning incentives in a manner that seeks to avoid pitfalls experienced in previous ventures, including Yearn Finance.
The project’s pitch emphasizes a vision of creating a sustainable, self-propelling economic cycle—an approach intended to ease the challenges posed by short-term price volatility. This philosophy aims to facilitate steady growth and development while establishing a stable foundation for future DeFi innovations.
Flying Tulip plans to introduce a native stablecoin, ftUSD, and will initially offer zero-fee trading capabilities on selected networks. It seeks to integrate automated market maker (AMM) protocols alongside central limit order book (CLOB) systems, further expanding its service offerings. Revenue streams for the platform will include trading and lending fees, liquidations, stablecoin yield, and insurance products, ensuring a diversified income structure.
In the initial phase, Flying Tulip is set to support Ethereum, Avalanche, BNB Chain, Sonic, and Solana, with a focus on rolling out services on Sonic first. With these developments, Flying Tulip stands to advance the ambitions of decentralized finance, potentially reshaping how users engage with these financial services in an increasingly digital economy.
