Flying Tulip's Onchain Redemption Model Rethinks DeFi Risk, Hits $1B Valuation

Andre Cronje-backed Flying Tulip, a decentralized finance (DeFi) technology platform, has raised $200 million in a private seed funding round at a $1 billion token valuation, according to multiple reports. The raise, structured as a Simple Agreement for Future Tokens (SAFT), includes participation from institutional investors such as Brevan Howard Digital, CoinFund, DWF Labs, FalconX, and Susquehanna Crypto, among otherstitle7^[7]. The project now aims to raise an additional $800 million through a public token sale at the same valuation, with the combined target reflecting a strategic effort to build a fully integrated onchain financial infrastructure.

The funding model introduces an innovative "onchain redemption right," allowing both private and public investors to burn FT tokens at any time to redeem up to their original principal in the asset contributed, such as ETHtitle7^[7]. This mechanism, described as a "perpetual put," aims to provide downside protection while preserving upside potential. Cronje emphasized that the raised capital will not be deployed directly but instead funneled into onchain yield strategies via protocols like Aave and Ethena, targeting a 4% annual return to fund growth, incentives, and token buybackstitle7^[7]. The team has no initial token allocation, with compensation tied to open-market buybacks funded by protocol revenue, aligning incentives with long-term performance.

Flying Tulip positions itself as a full-stack onchain exchange integrating spot trading, derivatives, lending, a native stablecoin (ftUSD), and onchain insurance within a cross-margin systemtitle6^[6]. The platform leverages adaptive curves, automated market makers (AMMs), and dynamic loan-to-value money markets to enhance trading efficiency. Sonic Labs provides the performance infrastructure, with scalability designed to support complex financial protocols. The project plans to launch on Sonic with zero-fee trading before expanding to Ethereum, Solana, Avalanche, and BNB Chain. ftUSD, a stablecoin designed for yield-generating opportunities, is a key component of the ecosystem, aiming to bridge traditional and decentralized finance.

The team, led by Cronje, has structured the project to mitigate risks associated with token price volatility. By offering a guaranteed redemption mechanism, the platform reduces pressure on the team to prioritize short-term token price movements over protocol developmenttitle7^[7]. Smart contracts with queues and rate limits will manage redemptions to ensure solvency, with transparency maintained through audited systems. The project employs approximately 15 team members across the U.S., Europe, and Asia and is actively hiring to scale operations.

The fundraising reflects broader trends in the DeFi sector, where institutional-grade infrastructure and regulatory clarity are becoming critical differentiators. Cronje, a veteran in DeFi having previously co-founded Yearn Finance and Sonic, has emphasized the need for a "ground-up rebuild" of financial systems to address inefficiencies in existing modelstitle6^[6]. The project’s launch timing aligns with growing regulatory efforts in the U.S. and EU to harmonize crypto frameworks, including the SEC and CFTC’s joint initiatives to streamline product definitions and capital requirementstitle5^[5]. While the U.S. focuses on private-sector innovation under the GENIUS Act, the EU’s MiCA framework emphasizes investor protections and financial stability, creating a dual regulatory environment that Flying Tulip aims to navigate through its multichain strategy.

With $1 billion in targeted funding and a focus on institutional-grade market structure, Flying Tulip’s success will depend on its ability to execute its technical roadmap while maintaining alignment with evolving regulatory standards. The project’s emphasis on yield generation, cross-margin systems, and onchain guarantees positions it as a potential competitor to major exchanges and lending protocols, though its multichain deployment and zero-fee model may attract early adopters seeking cost efficiency.