Will AC's return with FlyingTulip create the next summer of Decentralized Finance?

Author: Scof, ChainCatcher

Edited by: TB, ChainCatcher

On March 10th, Andre Cronje, the founder of Sonic Labs, Yearn Finance, and Keep3rV1, updated his personal social platform profile to include the title of "flyingtulip founder".


As a competitor to Hyperliquid, FlyingTulip has attracted much attention as soon as it was launched. It adopts an adaptive curve AMM, offering lower funding rates, better loan-to-value ratios, and higher LP returns, backed by SonicLabs for higher TPS.

) Andre Cronje: The "Madman" and Disruptor of the DeFi Space

To introduce FlyingTulip, we have to introduce its legendary founder Andre Cronje.

Andre Cronje, a legendary figure known to everyone in the DeFi community, whose name always manages to quickly heat up the market mood once it appears. However, unlike traditional programmers, Cronje originally studied law and graduated from the Law School of Stellenbosch University in South Africa.

But fate played a joke on him, allowing him to accidentally come into contact with computer science. As a result, he became self-taught and even became a lecturer. This leap-like growth trajectory also laid the foundation for his style in the DeFi field in the future - unconventional, highly creative, and with a touch of madness.

After entering the world of encryption, Cronje quickly demonstrated his technical talent and extreme execution ability. His masterpiece, Yearn Finance (YFI), came out in 2020, and quickly became one of the most influential projects in the history of DeFi with the concept of fair launch (no pre-mining, no team allocation). Since then, he has led or participated in several well-known projects such as Keep3r Network, Solidly, Fantom, igniting market sentiment time and time again.

Now, FlyingTulip has become another bold attempt by him in the field of derivative trading protocols. Faced with this developer who is both a "genius" and a "madman," the market is still waiting for an answer: can he once again start a DeFi revolution?

What is FlyingTulip?

FlyingTulip is a DeFi integrated platform based on Automated Market Maker (AMM), integrating functions such as trading, liquidity provision, and borrowing. Its core feature is to eliminate liquidity fragmentation, allowing users to conduct spot trading, leveraged trading, perpetual contracts, etc., within the same AMM system without the need to transfer funds between multiple protocols. This all-in-one liquidity solution improves capital efficiency, making trading experience smoother, while reducing trading costs.

In the lending function, FlyingTulip adopts a dynamic LTV (Loan-to-Value Ratio) model based on AMM. Compared to traditional DeFi lending protocols, it not only considers collateral prices but also combines market depth and volatility for real-time adjustments, ensuring a balance between loan security and capital efficiency.

![Will AC's return with FlyingTulip usher in the next DeFi summer?]###https://img.gateio.im/social/moments-d26be8d95223a431206636a59cce1808(

) Automated Market Maker AMM: Making Liquidity Management Easier

Traditional AMM models, such as Uniswap V2, use the constant product formula X * Y = k. This mechanism, though simple, leads to liquidity spread evenly across all price ranges, while in reality, most trades concentrate in specific price ranges. As a result, liquidity often cannot be efficiently utilized. Uniswap V3 introduces concentrated liquidity, allowing LPs (liquidity providers) to choose specific price ranges to provide funds. However, this approach requires a higher level of financial knowledge, making it more complex for ordinary users, and LPs may face significant impermanent loss when prices fluctuate significantly.

FlyingTulip solves this problem through a dynamic AMM mechanism. It can automatically adjust the curve shape according to market volatility, allowing liquidity to intelligently match market demand:

• When the market is stable (low volatility), liquidity will automatically concentrate around the current price, similar to the 'constant sum curve' of the form X + Y = K, which can increase capital utilization and lower trading costs.
• When the market is highly volatile (high volatility), liquidity will automatically disperse, approaching the 'constant product curve' of X * Y = K to adapt to potential large price changes and reduce losses caused by one-sided market fluctuations.

FlyingTulip relies on oracles to continuously monitor the real-time volatility (rVOL) and implied volatility (IV) of the market, and dynamically adjust liquidity distribution based on these data. LPs do not need to manually set complex price ranges, just deposit liquidity, and the system will automatically optimize the allocation, enabling them to achieve the best return in different market conditions while significantly reducing impermanent loss.

This mechanism makes FlyingTulip a more user-friendly DeFi platform for ordinary users - even if you are not familiar with the LP mechanism, you can easily provide liquidity without worrying about complex operations or potential losses.

( Dynamic LTV model based on AMM: a more flexible way of borrowing and lending

In traditional DeFi lending protocols, LTV (Loan-to-Value ratio) is a fixed value, usually set based on the token's risk level. For example, if a token is considered to be of medium risk, users can borrow up to 70% of the collateral value. However, this fixed LTV ignores two key factors:

1. Market Depth - If the amount borrowed is too large, it may significantly affect the token price, leading to a sudden decrease in market liquidity.
2. Real-time Volatility - When the market is highly volatile, a fixed LTV may result in assets quickly falling below the liquidation threshold, increasing the risk of liquidation.

FlyingTulip solves this problem through the adaptive AMM mechanism, creating a dynamic LTV model that can adjust borrowing limits in real time based on market conditions. For example:

• When the market is stable (low volatility, sufficient liquidity): Users can get a higher LTV, for example 80%, i.e. mortgage 2000 US dollars of ETH, can borrow 1600 US dollars.
• During market turbulence (increased volatility): LTV will automatically decrease to 50%, meaning the same 2000 USDT worth of ETH can only borrow 1000 USDT to reduce liquidation risk.
• When the collateral is too large (occupying a high proportion of market liquidity): LTV may be further reduced, for example, 45%, to ensure that large loans will not have a significant impact on market prices.

This dynamic LTV adjustment makes lending more flexible, allowing users to not have to constantly monitor market changes or adjust positions frequently. The system will automatically optimize lending limits based on market conditions. This not only reduces the risk of large accounts being liquidated, leading to market collapse, but also makes the entire DeFi ecosystem more stable, creating a safer environment for borrowers and liquidity providers.

![AC brings FlyingTulip back. Will it create the next DeFi summer?])https://img.gateio.im/social/moments-e80837f6bb44938ebecdc499d6c41426###

( The opportunity and risk coexist, is the market a carnival or a deep pit?

As the market begins to discuss whether FlyingTulip will issue tokens, the discussions on X have become more and more intense. Looking back at AC's past projects, almost all of them have relied on token incentives and community promotion to rise rapidly, so it seems only a matter of time before FlyingTulip launches "Tulip Coin" in the future. Currently, various speculations surrounding TGE are emerging one after another, and information such as public offering prices and private placement discounts continues to ferment within the community.

However, AC's projects have always been characterized by high returns and high risks. YFI soared to a thousand-fold myth after a fair launch in the past year, but EMN (Eminence Finance) also suffered a zero due to vulnerabilities. In the frenzy of the market, how to balance speculative impulses and risk management is the question that rational players need to consider.

In addition, AC has continued his 'mysterious marketing' style this time, not making explicit publicity, but causing the market to stir on its own through subtle actions. For example, he recently liked the tweet about Magpie Protocol (another related DEX project) on X, immediately sparking various speculations. KOLs in the Chinese community have also begun to pay attention to and discuss FlyingTulip, fueling market sentiment.

The charm of DeFi lies in the coexistence of high risk and high returns. In the past, AC has always been able to bring new imaginative space to this field. But whether FlyingTulip can replicate the brilliance of YFI, perhaps only the market will provide the answer.