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Flying Tulip ftUSD

ftUSD

Product Overview​

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ftUSD is Flying Tulip’s dollar‑pegged token designed for stability first, with optional yield when you choose to stake it as sftUSD. Unstaked ftUSD serves as a composable, on‑chain dollar across the ecosystem (trading, settlement, collateral). If you want yield, you opt in by staking your ftUSD for sftUSD. Proceeds from unstaked ftUSD accrue to the protocol, helping fund operations and deepen liquidity; stakers receive the distributed yield. ftUSD and sftUSD are fully onchain, auditable and trasparent, no oracles, not centralized systems.

Key idea

  • ftUSD = stable, non‑yielding by default (great for payments, settlement, collateral).
  • sftUSD = staked ftUSD that earns yield (opt‑in).
  • Unstaked ftUSD proceeds → protocol. Staked ftUSD proceeds → stakers (via sftUSD).

Why choose ftUSD​

  • Stable unit of account. A $1‑target stable designed to act as the settlement currency across Flying Tulip (e.g., perps, order book settlement, liquidity).
  • Optional yield when you want it. Stake to sftUSD to earn distributed strategy carry; keep ftUSD unstaked if you prefer pure stability or need immediate liquidity.
  • Engineered for resilience. A delta‑neutral architecture aims to reduce liquidation risk by balancing long/short legs and sizing positions conservatively.
  • On‑chain transparency. Collateral, parameters, and flows are visible and programmatic.
  • Composability. Use ftUSD throughout the FT product suite: trade, settle, post as collateral, or provide liquidity where available.

Important
Staked ftUSD (sftUSD) accrues yield distributions.

How ftUSD works​

ftUSD maintains its dollar target using balanced, delta‑neutral strategies that combine conservative money markets and staking with offsetting short exposure. The aim is to generate strategy carry (net of costs) while keeping net market exposure near zero.

Illustrative pipeline (one possible strategy):

  1. Supply base collateral to a money market (e.g., USDC → Aave) to earn low‑risk interest.
  2. Borrow a hedging asset (e.g., Sonic “S”) against that collateral, creating a short leg (you owe S).
  3. Stake the borrowed asset (e.g., S → stS via a staking venue) to earn staking rewards = a long leg in stS.
  4. Loop collateral prudently (e.g., deposit stS back to the money market) to increase safety buffers and carry.

The long (staked) side and the short (borrowed) side are sized to offset directional risk and reduce liquidation risk under typical conditions. Risk controls (position caps, rebalancing bands, and venue limits) constrain exposure.

What varies
Exact venues, parameters, and chain support can change over time. The principle remains: delta‑neutral construction + conservative sizing to target $1 while producing strategy carry.

Minting ftUSD​

Minting creates new ftUSD against contributed assets through the Flying Tulip App.

Quick flow

  1. Open the Mint ftUSD screen.
  2. Choose your input asset (e.g., USDC).
  3. Review the quote and confirm.
  4. Receive ftUSD in your wallet.

Notes

  • Minting ftUSD does not start yield. To earn yield, stake to sftUSD.

Burning

  • Convert ftUSD → input asset at the prevailing rate.
  • Timing and any small exit/cooldown parameters are shown in‑app (subject to change with risk settings and network conditions).

Staking ftUSD → sftUSD​

Staking converts ftUSD into sftUSD, the yield‑accruing receipt token for the staking pool.

Quick flow

  1. Open Stake ftUSD.
  2. Enter the amount of ftUSD to stake.
  3. Confirm to receive sftUSD (your staked position).

How yield is delivered

  • sftUSD reflects your claim on the pool’s accumulated proceeds.
  • Distribution can be via increasing exchange rate (sftUSD → ftUSD) shown in the UI.
  • Rates are variable and not guaranteed; they depend on realized strategy carry net of costs and any active policy buffers.

Unstaking

  • Convert sftUSD → ftUSD at the prevailing rate.
  • Timing and any small exit/cooldown parameters are shown in‑app (subject to change with risk settings and network conditions).

Reminder

  • ftUSD (unstaked) → no yield; proceeds accrue to the protocol.
  • sftUSD (staked) → receives distributed yield from ftUSD strategies.

Where the yield comes from​

Gross sources (variable; examples)

  • Money‑market interest (e.g., Aave supply APRs for stablecoins or LST collateral).
  • Staking rewards (e.g., stS) on the long leg.

Net distributions

  1. Strategy carry is realized net of borrow costs, fees, and buffers.
  2. Unstaked ftUSD: proceeds accrue to the protocol (fund operations, deepen liquidity, support the token‑first model).
  3. Staked ftUSD (sftUSD): distribution flows to stakers, via the pool’s accounting.

Transparency
Dashboards will publish realized carry, pool exchange rate, and venue exposures where feasible.

Benefits at a glance​

  • Optionality: Hold ftUSD for pure stability, or stake to sftUSD to earn protocol distributions.
  • Lower operational burden: Yield routing and rebalancing are handled on‑chain; staking is one click.
  • Ecosystem native: ftUSD is the settlement currency across perps and other markets; widely usable as collateral/liquidity.
  • Risk‑aware design: Delta‑neutral construction with sizing bands and venue caps to reduce common liquidation paths.

Risks​

  • Peg and basis risk: Severe market moves can widen basis or stress hedges; the $1 target can deviate.
  • Venue risk: Money markets, staking, and external protocols carry smart‑contract and validator risks.
  • Liquidity/exit timing: Staked assets (LSTs) may require queues; large rebalances can take time.
  • Parameter risk: Strategy weights, caps, and rebalancing rules can change as risk conditions change.

See Risks, Security & Audits for a full discussion of general DeFi risks and capital‑allocation specifics.

FAQs​

Does ftUSD pay interest automatically?
No. ftUSD is non‑yielding by default. To earn, stake to sftUSD.

What’s the difference between ftUSD and sftUSD?
ftUSD is the base stable (target $1). sftUSD is the staked receipt that accrues protocol distributions tied to ftUSD strategies.

How is the ftUSD peg maintained?
By constructing delta‑neutral positions (balanced long/short) with conservative sizing and rebalancing controls. This reduces exposure to directional market moves.

Can I use ftUSD across the protocol?
Yes. ftUSD is designed as the settlement currency and a common collateral across the product suite; availability varies by feature and chain.

Where can I see rates and history?
The Stake UI shows current pool stats (e.g., exchange rate, historical performance). Rates are variable and not guaranteed.

  • FT Token: Product Overview: how value flows into FT via buybacks/burns
  • Public Capital Allocation (PCA): mechanics, FT PUT Option lifecycle
  • Risks, Security & Audits: risk framework and controls
  • How‑to Guides: “Mint ftUSD”, “Stake ftUSD → sftUSD”, “Unstake sftUSD → ftUSD” (coming soon)