In a significant move for the decentralized finance (DeFi) sector, Andre Cronje, the founder of Yearn Finance, has successfully raised $200 million in a private seed funding round for his newest venture, Flying Tulip. The funding is a stepping stone toward the project’s initial coin offering (ICO), which aims to reach a total target of $1 billion in valuation. This latest initiative has attracted the backing of renowned investors such as Brevan Howard Digital, CoinFund, DWF Labs, and Susquehanna Crypto.
Flying Tulip is designed to serve as a comprehensive on-chain exchange that integrates various DeFi functionalities, including spot trading, derivatives, lending, stablecoins, and insurance products into one cohesive platform. This concept builds upon the groundwork laid by Cronje in 2020 with the Deriswap model, which sought to combine multiple DeFi elements into a singular ecosystem.
A notable feature of Flying Tulip is its introduction of an “on-chain redemption right.” This innovative mechanism allows both private and public investors to redeem their FT tokens for their original investment at any point, thereby providing an essential layer of downside protection. This approach aims to prevent the misallocation of capital, as the raised funds will be directed exclusively towards on-chain strategies, including protocols like Aave, Ethena, and Spark, promising an estimated annual yield of around 4%.
Cronje emphasized that this yield is projected to generate approximately $40 million annually from the total capital raised, which will be pivotal for the further development of the platform. Importantly, the team behind Flying Tulip will not receive an initial distribution of tokens. Instead, their earnings will be tied to market buybacks funded by the protocol’s revenue, aligning the team’s interests closely with the platform’s long-term success.
As outlined in a presentation reviewed by The Block, Cronje envisions that the revenue generated by the platform will be channeled into token buybacks, ecosystem incentives, and enhanced yields for users. This methodology is expected to cultivate a “self-reinforcing growth flywheel” that mitigates the impacts of short-term market fluctuations, a challenge that Cronje has faced with his earlier achievements, like Yearn Finance.
Flying Tulip also plans to introduce a native stablecoin, ftUSD, and offer zero-fee trading on select networks. To achieve this, the platform will incorporate both automated market maker (AMM) models and central limit order book (CLOB) systems. Revenue streams are projected to come from a mix of trading and lending fees, liquidation events, stablecoin yields, and insurance products.
The initial phase of the Flying Tulip platform will support several major blockchain networks, including Ethereum, Avalanche, BNB Chain, Sonic, and Solana. The team is keen to prioritize its launch on Sonic as they move ahead with their plans.
While specific timelines for the platform’s official launch and upcoming token sale have yet to be announced, the ambitious vision laid out by Cronje for Flying Tulip positions it as a potentially game-changing player in the DeFi landscape.
