Flying Tulip

What is Flying Tulip?

Flying Tulip is an on‑chain financial system that standardizes pricing, credit, and risk across a suite of products, spot trading (AMMAMMOn‑chain market using formulas instead of a central order book to quote prices and execute swaps.View glossary entry + CLOBCLOBAn exchange mechanism that matches bids and asks; integrated with Flying Tulip’s permissioned lending for cross‑collateralized trading while deposits continue to accrue.View glossary entry), lending, perpetual futuresperpetual futuresFutures without expiration; Flying Tulip uses on‑chain trading as the primary price source with sub‑second settlement and funding tied to real borrowing costs.View glossary entry, insurance, and a settlement railsettlement railThe ftUSD settlement layer used to clear trades and transfers across products.View glossary entry (ftUSDftUSDA delta‑neutral, yield‑bearing stable asset designed to target $1 while minimizing liquidation risk by balancing long/short exposures (e.g., supply/stake/borrow loops).View glossary entry). The design goal is straightforward: reuse the same unit of collateralcollateralAssets allowed as collateral and the maximum per‑asset size configured to manage concentration and risk.View glossary entry across multiple functions, price risk based on real, executable liquidity rather than static tables or delayed oracles, and route system cashflows back to the token in a transparent, programmatic way.

"Better Yield" means capital efficiencycapital efficiencyUsing the same collateral to support multiple activities (e.g., accrue yield and back trading/borrowing) to increase effective return per unit of capital.View glossary entry; the same deposit can accrue base yield while also securing lending, resting CLOBCLOBAn exchange mechanism that matches bids and asks; integrated with Flying Tulip’s permissioned lending for cross‑collateralized trading while deposits continue to accrue.View glossary entry orders, or futures collateralcollateralAssets allowed as collateral and the maximum per‑asset size configured to manage concentration and risk.View glossary entry, plus a token‑first model that converts protocol revenues into buybacks (and, where specified, user distributions). "Better UXUXThe overall experience of using a product, including ease, clarity, and flow.View glossary entry" means the mechanics are encoded in contracts and unified across products: the same depth‑aware prices feed trading, LTVs, funding, and liquidations; the same guardrails and change‑management apply everywhere.

The problems we address

Capital isolation. In most DeFiDeFiFinancial services built on public blockchains using smart contracts rather than centralized intermediaries.View glossary entry systems, each product has its own silos collateralcollateralAssets allowed as collateral and the maximum per‑asset size configured to manage concentration and risk.View glossary entry. You supply to a lending market, and that capital cannot simultaneously back orders or collateralcollateralAssets allowed as collateral and the maximum per‑asset size configured to manage concentration and risk.View glossary entry. Flying Tulip's permissioned credit layer supports cross‑collateralcross‑collateralUsing one deposit as collateral across multiple markets or products simultaneously (e.g., lending, CLOB, futures).View glossary entry, so one deposit can secure multiple activities at once while still accruing its base yield.

Fragmented liquidity and static pricing. Traditional AMMs x·y=k are robust but static; they deliver wide spreads in calm markets and expose LPs to heavy divergence when volatility rises. Flying Tulip's Spot uses a hybrid curvehybrid curveA dynamic blend between constant sum (tight spreads in calm markets) and constant product (LP protection in volatility), informed by regime signals (e.g., EMAs) and guardrails.View glossary entry that leans constant‑sum in stable regimes (tight effective spreads) and leans constant‑product in stress (more curvature to protect LPs). Price and risk are computed from what the market can actually absorb, not just last prints.

USD‑only debt assumptions. Many lending markets implicitly force USD‑denominated views of risk. We support asset‑consistent borrowing and portfolio‑level cross‑collateralization in the permissioned pool, while permissionless markets remain pair‑scoped for simplicity.

Centralized dependencies. Perpetual futuresPerpetual futuresFutures without expiration; Flying Tulip uses on‑chain trading as the primary price source with sub‑second settlement and funding tied to real borrowing costs.View glossary entry often rely on external oracles with multi‑second ticks and governance bottlenecks. FT Futures settle to internal trading (AMMAMMOn‑chain market using formulas instead of a central order book to quote prices and execute swaps.View glossary entry + CLOBCLOBAn exchange mechanism that matches bids and asks; integrated with Flying Tulip’s permissioned lending for cross‑collateralized trading while deposits continue to accrue.View glossary entry) with sub‑second updates and depth‑aware limits, removing a class of oracleoracleExternal feed of asset prices. Flying Tulip futures derive pricing/settlement from in‑house trading activity to avoid oracle lag/manipulation.View glossary entry lag/manipulation risk.

System design

Trading engine: Spot (AMM + CLOB) as the pricing spine

The AMMAMMOn‑chain market using formulas instead of a central order book to quote prices and execute swaps.View glossary entry blends constant‑sum and constant‑product via regime signals (e.g., EMAs over price/dispersion). Pre‑trade simulation and guardrail enforce bounded impact and minimum reserves. A CLOBCLOBAn exchange mechanism that matches bids and asks; integrated with Flying Tulip’s permissioned lending for cross‑collateralized trading while deposits continue to accrue.View glossary entry runs alongside for price‑time‑priority limit orders. The router sweeps CLOBCLOBAn exchange mechanism that matches bids and asks; integrated with Flying Tulip’s permissioned lending for cross‑collateralized trading while deposits continue to accrue.View glossary entry liquidity first, then crosses residual flow against the AMMAMMOn‑chain market using formulas instead of a central order book to quote prices and execute swaps.View glossary entry's adaptive curve. The engine maintains both TWAPTWAPA time‑only averaging of price used in oracles and analytics; complements depth‑aware measures.View glossary entry (time‑weighted average price) and RWAPRWAPA price metric that weights observations by available reserves near the path of execution, providing a depth‑aware benchmark for swaps.View glossary entry (reserve‑weighted average price) windows; downstream systems use these windows as sources of executable price and depth.

Lending: permissionless pairs and a permissioned cross‑collateral pool

• Permissionless Lend: every Spot pair exposes a lending market automatically. Borrowing power is size‑ and depth‑aware (from Spot windows) rather than fixed tables; snapshot LTVsnapshot LTVBorrow limits fixed at the time of opening/adjustment to protect users from abrupt parameter changes.View glossary entry is taken at open/adjust so rules don't shift under live positions; liquidations are soft (time‑sliced, depth‑aware, CLOBCLOBAn exchange mechanism that matches bids and asks; integrated with Flying Tulip’s permissioned lending for cross‑collateralized trading while deposits continue to accrue.View glossary entry‑aware).
• Permissioned Lend: curated assets share a single pool with cross‑collateralcross‑collateralUsing one deposit as collateral across multiple markets or products simultaneously (e.g., lending, CLOB, futures).View glossary entry across Lend/CLOBCLOBAn exchange mechanism that matches bids and asks; integrated with Flying Tulip’s permissioned lending for cross‑collateralized trading while deposits continue to accrue.View glossary entry/Futures. A debt‑netting mechanism enables delta‑neutraldelta‑neutralA portfolio whose net directional exposure is approximately zero, constructed by balancing long and short legs.View glossary entry constructions (e.g., ftUSDftUSDA delta‑neutral, yield‑bearing stable asset designed to target $1 while minimizing liquidation risk by balancing long/short exposures (e.g., supply/stake/borrow loops).View glossary entry) with near‑zero conventional liquidationliquidationForced unwind of risky positions; Flying Tulip emphasizes gradual "soft" liquidations via Spot routing, with size/time‑slicing and keeper incentives.View glossary entry paths under configured bounds. One deposit can accrue a money‑market yield while backing orders and futures collateralcollateralAssets allowed as collateral and the maximum per‑asset size configured to manage concentration and risk.View glossary entry simultaneously.

Perpetual futures: oracleless, depth‑aware

FT Futures use internal trading as the oracleoracleExternal feed of asset prices. Flying Tulip futures derive pricing/settlement from in‑house trading activity to avoid oracle lag/manipulation.View glossary entry. LeverageLeverageTrading with exposure greater than posted collateral; in FT futures, leverage constraints are set using depth‑aware metrics.View glossary entry limits, liquidationliquidationForced unwind of risky positions; Flying Tulip emphasizes gradual "soft" liquidations via Spot routing, with size/time‑slicing and keeper incentives.View glossary entry sizing, and slippageslippageThe difference between expected and executed price due to trade size and available liquidity.View glossary entry guards are driven by TWARTWARA depth‑aware measure used in futures that considers how much of X can be sold for Y over time, enabling safer leverage and funding calculations.View glossary entry‑family windows that ask, "How much of X could clear for Y over this interval without breaching reserves?" Funding links to actual borrowing costs in the Lend markets. Settlement is in ftUSDftUSDA delta‑neutral, yield‑bearing stable asset designed to target $1 while minimizing liquidation risk by balancing long/short exposures (e.g., supply/stake/borrow loops).View glossary entry; opt‑in settlement LPs supply ftUSDftUSDA delta‑neutral, yield‑bearing stable asset designed to target $1 while minimizing liquidation risk by balancing long/short exposures (e.g., supply/stake/borrow loops).View glossary entry and accrue per‑settlement fees, with exposure balanced by pool policy.

Settlement rail: ftUSD / sftUSD

ftUSDftUSDA delta‑neutral, yield‑bearing stable asset designed to target $1 while minimizing liquidation risk by balancing long/short exposures (e.g., supply/stake/borrow loops).View glossary entry is the dollar‑target settlement currencysettlement currencyftUSD is used as the settlement currency; opt‑in LPs deposit ftUSD to settlement pools and accrue fees.View glossary entry used across the system. It is non‑yielding by default (unstaked ftUSDftUSDA delta‑neutral, yield‑bearing stable asset designed to target $1 while minimizing liquidation risk by balancing long/short exposures (e.g., supply/stake/borrow loops).View glossary entry proceeds accrue to the protocol). Users who want to yield stake to sftUSDsftUSDStaked ftUSD receipt token that accrues the staking pool’s yield.View glossary entry and receive distributions via the pool's accounting (variable; not guaranteed). The portfolio construction underpinning ftUSDftUSDA delta‑neutral, yield‑bearing stable asset designed to target $1 while minimizing liquidation risk by balancing long/short exposures (e.g., supply/stake/borrow loops).View glossary entry targets dollar stability with delta‑neutraldelta‑neutralA portfolio whose net directional exposure is approximately zero, constructed by balancing long and short legs.View glossary entry positioning and conservative sizing.

Risk & operations

The platform emphasizes unwind‑friendly positions and defense‑in‑depth controls:

• Policy: conservative allocations (no leverageleverageTrading with exposure greater than posted collateral; in FT futures, leverage constraints are set using depth‑aware metrics.View glossary entry, no bridgingno bridgingBacking capital remains on the source chain and is not bridged as part of the default allocation policy.View glossary entry for treasury backing capitalbacking capitalThe contributed assets that back each primary FT position while the Perpetual PUT remains open.View glossary entry), per‑asset/venue caps, circuit breakers, and staged parameter changes.
• Execution: pre‑trade simulation, bounded fee schedules (lower in calm regimes, higher in stress), and soft liquidations that route through Spot with time‑sliced clips.
• Transparency: addresses, parameters, windows (TWAPTWAPA time‑only averaging of price used in oracles and analytics; complements depth‑aware measures.View glossary entry/RWAPRWAPA price metric that weights observations by available reserves near the path of execution, providing a depth‑aware benchmark for swaps.View glossary entry/TWARTWARA depth‑aware measure used in futures that considers how much of X can be sold for Y over time, enabling safer leverage and funding calculations.View glossary entry), utilizationutilizationThe share of a pool’s assets that are currently borrowed or in active use.View glossary entry, and fee schedules are published; audits and incident processes are documented separately.

Programmatic cashflows

Protocol cashflows (trading, lending, futures, insurance, settlement rails) feed a buyback pipeline for FT. Where policy specifies, bought FT is distributed to users via product programs; burns reduce supply directly. Revenue‑funded burns govern unlocks (Foundation/Team/Incentives 40:40:20, one‑for‑one); interest‑only (backing capitalbacking capitalThe contributed assets that back each primary FT position while the Perpetual PUT remains open.View glossary entry carry) burns do not unlock; those simply reduce supply.

Why this architecture

By centering everything on executable liquidity and a shared risk model, Flying Tulip removes the guesswork between products: the Spot's depth informs LTVs and liquidations; the same windows govern future leverageleverageTrading with exposure greater than posted collateral; in FT futures, leverage constraints are set using depth‑aware metrics.View glossary entry and funding; the same deposit backs multiple activities; and the same cashflow rules route value back to the token. The outcome is a system that behaves consistently across markets and makes capital work once for several jobs, with the safety properties you need when conditions change quickly.