Flying Tulip Launch, Relentless RWAs, BTC-Backed Bonds, x402 Comeback

Welcome back to DeFi In Five!

Today, we’ve got plenty of material to take your mind off the price charts

See, you’re feeling better already! I think.

While last week was certainly a hard act to follow, there’s still no shortage of material to cover today. After all, DeFi never sleeps.

Let’s begin!

This week, we’re featuring a new project that just launched its token in a very unique way: Flying Tulip.

The project’s founder, Andre Cronje, has been extremely influential in designing DeFi protocols in the past. Two of his most influential projects (and arguably among the most influential in DeFi history) are Yearn Finance and Solidly.

Yearn Finance 

Yearn was the first DeFi platform to automatically manage stablecoin positions to maximize yield – also known as a yield aggregator – via vaults (Andre also coined this term with Yearn).

Solidly

While Solidly had a relatively short lifespan, its design – known as the ve(3,3) model – influenced projects like Pendle and Aerodrome (both of which are in our DeFi20 Index). 

In this model, the longer token holders lock their tokens, the greater the rewards:

Andre has worked on many projects throughout his 6+ years in DeFi, and while not all of them have been major successes, he’s had one of the largest impacts of any single builder in the industry. 

His latest creation is Flying Tulip.

Before we get into the token launch (which is unique in and of itself), we’ll do a quick overview of what the app actually is.

Ultimately, Flying Tulip is made up of several components: 

Spot trading 

Flying Tulip’s dynamic AMM automatically adjusts spreads and pricing based on market conditions, aiming to give traders and liquidity providers maximum protection.

Lending market 

Flying Tulip features 2 lending markets: one is permissionless and the other is permissioned.

The permissionless market contains lending markets for any trading pair in the spot market, while the permissioned market contains assets that the protocol is willing to cross-collateralize (likely major assets like WBTC, ETH, and stablecoins).

Futures trading 

Trade perpetual futures that derive prices from Flying Tulip’s own spot exchange rather than relying on a third party oracle.

Insurance 

Anyone can deposit funds for as long as they want to pay a continuously-streaming premium for protection. 

Additionally, anyone can provide insurance by depositing into the “capital provider” pool – allowing them to earn steady premium income.

Stablecoin (ftUSD)

ftUSD will be the main settlement and collateral asset within the Flying Tulip ecosystem. Its collateral backing will be managed according to various strategies to earn yield for sftUSD – which you can get by staking ftUSD. 

While each one of these has its own unique properties, the most interesting part of the project to me is the token.

For some context, almost all tokens launched in 2025 ended up deep in the red. As a result, people have gotten extremely critical about how token launches are managed, how much of the supply is given to VCs vs platform users, etc.

So, Flying Tulip completely rewrote the ICO playbook.

During their token sale, anyone could deposit any amount to buy a proportional amount of FT tokens for $0.10 each. 

Along with their FT tokens, participants got a corresponding put option which can be used to redeem the participant’s initial investment amount. This serves as a hedge against potential downside, protecting investors from the fate that many suffered after recent token launches.

Additionally, the Flying Tulip isn’t getting any of the raised funds initially. Instead, all raised capital will be managed in the project’s treasury, and the yield earned on it will fund operations and token buybacks. 

In total, over $200M was raised for the FT token launch, which is strong considering the poor market environment. For comparison, Monad raised ~$269M for their MON token sale last November, when overall market sentiment wasn’t great but not nearly as bad as it is now.

Personally, I’d say their sale was a success – I’m sure the market will test their redemption mechanism, and I’m excited to see how it works out!

That rounds up this week’s featured project! Let’s move onto the news.

If you made it this far, I appreciate you! While this was an exciting week, our first DeFi In Five covered what may be the biggest week of the past several months. If you haven’t checked it out yet, you can find it here!

That’s all for this week’s DeFi In Five! Be sure to let us know what stuck out to you, or if we missed any other key events over the past week.

And finally, make sure to subscribe below — see you next week!