Subscribe to FEB Research Labs
<100 subscribers
Share Dialog
Share Dialog
Flying Tulip is an “on-chain market structure” initiative led by Andre Cronje. It aims to build a financial infrastructure that remains explainable even under regulated conditions by designing trading, collateral, liquidation, and capital allocation as one integrated system. In its fundraising, participants in the primary sale are granted an “on-chain redemption right (perpetual put),” allowing them to burn
Flying Tulip’s real differentiator is that it bakes in, from the design stage, the conditions that regulated buyers tend to require.
First, it defines downside protection for primary-sale participation as an on-chain “redemption right.” If investors want to exit, they can burn $FT and withdraw principal-equivalent value. This can reduce the “explanation cost” when prices fall.
Second, it explicitly connects protocol revenue to token value through the mechanism of “buyback and burn.” The official documentation states that revenue and fees generated from user activity (ftUSD, spot, lending/borrowing, futures, insurance, etc.) are allocated to $FT buybacks.
Third, it strongly emphasizes a cross-margin orientation—using a single collateral base across multiple functions. From an operational and audit perspective, this reduces fragmentation in collateral management, and its value tends to increase as financial activity becomes more institutionalized.
Andre Cronje is widely regarded as a legendary DeFi builder, best known for creating and iterating on foundational protocols such as Yearn Finance and for helping shape the early architecture and product philosophy of DeFi. Against that backdrop, his views on regulation carry an outsized signal because they come from someone who has repeatedly translated abstract design principles into working on-chain systems.
Andre Cronje said there is a "need, or even necessity" for crypto regulation in his first blog post since leaving the space in March.
In his 2022 writing, Cronje states that regulation and legislation are “protection for bad times,” and that their necessity is increasing. In the piece published the following day, he argues not for an abstract notion of “crypto regulation,” but for “regulated crypto,” where entities such as companies and exchanges can obtain licenses, and he clearly describes building mechanisms to onboard institutions. If you map this context onto Flying Tulip, the goal is not “winning in unregulated free competition,” but “redesigning on-chain market structure into a form that capital entering after regulation matures can adopt.” Flying Tulip itself explicitly states that it is targeting an “institutional-grade market structure.”
The mercurial "Godfather of DeFi" is now pivoting to compliant crypto after abruptly quitting decentralized finance in early March.
Hyperliquid has a powerful presence in on-chain perpetual futures, with approximately $58.17M in revenue observed over the most recent 30 days. In other words, “absorbing derivatives demand on-chain” is already proven. By contrast, what Flying Tulip emphasizes is not going head-to-head to steal share through a trader-experience arms race, but building a receptacle for “supervised capital” that increases as regulation tightens. While both share the commonality of “on-chain derivatives,” Flying Tulip foregrounds “explainability”—through redemption rights, capital allocation design, and integrated risk management. As a result, rather than chasing the short-term, high-turnover trading pie, it is more likely to be positioned toward the pie constrained by regulatory requirements.
On the regulatory front, MiCA in the EU has entered its full-application phase, and timelines such as transition measures for existing providers (up to 18 months) have made “deadlines for compliance” concrete. In such a phase, barriers for institutions to participate in crypto can decline, while infrastructure providers are required to meet explicit design requirements. On the market front, derivatives demand is expanding. CoinGecko’s annual report states that in 2025, CEX perpetual volume reached $86.2 trillion, while DEX perpetual volume reached $6.7 trillion. What matters here is that on-chain derivatives are shifting from a niche into a segment of a massive market. The more regulatory readiness progresses, the more the next wave of participants will be those with large capital but heavy constraints—and Flying Tulip’s design philosophy is aimed at that cohort.
The crypto market underwent a sharp -23.7% correction in 2025 Q4, though trading volumes surged as volatility spiked.
Going forward, what will determine whether Flying Tulip can truly build broad support is not narrative, but verifiable specifics: how far the specifications for redemption rights and reserves are finalized; how they are audited; under what conditions they can be changed; how far the system can be offered in practice given jurisdiction-by-jurisdiction regulatory interpretations; and how the system behaves under market stress (liquidations, reserves, liquidity). As these become clearer, it will become possible to judge whether Flying Tulip can genuinely earn sustained adoption.
Disclaimer: This article is for informational purposes only and does not constitute a solicitation or recommendation to buy, sell, hold, or invest in any specific cryptocurrency (token). The content is based on publicly available information and reflects the author's organization and views (including estimations). Cryptocurrencies carry significant risks, including price volatility, liquidity issues, regulatory changes, and technical flaws, which may result in substantial loss of principal.
Flying Tulip is an “on-chain market structure” initiative led by Andre Cronje. It aims to build a financial infrastructure that remains explainable even under regulated conditions by designing trading, collateral, liquidation, and capital allocation as one integrated system. In its fundraising, participants in the primary sale are granted an “on-chain redemption right (perpetual put),” allowing them to burn
Flying Tulip’s real differentiator is that it bakes in, from the design stage, the conditions that regulated buyers tend to require.
First, it defines downside protection for primary-sale participation as an on-chain “redemption right.” If investors want to exit, they can burn $FT and withdraw principal-equivalent value. This can reduce the “explanation cost” when prices fall.
Second, it explicitly connects protocol revenue to token value through the mechanism of “buyback and burn.” The official documentation states that revenue and fees generated from user activity (ftUSD, spot, lending/borrowing, futures, insurance, etc.) are allocated to $FT buybacks.
Third, it strongly emphasizes a cross-margin orientation—using a single collateral base across multiple functions. From an operational and audit perspective, this reduces fragmentation in collateral management, and its value tends to increase as financial activity becomes more institutionalized.
Andre Cronje is widely regarded as a legendary DeFi builder, best known for creating and iterating on foundational protocols such as Yearn Finance and for helping shape the early architecture and product philosophy of DeFi. Against that backdrop, his views on regulation carry an outsized signal because they come from someone who has repeatedly translated abstract design principles into working on-chain systems.
Andre Cronje said there is a "need, or even necessity" for crypto regulation in his first blog post since leaving the space in March.
In his 2022 writing, Cronje states that regulation and legislation are “protection for bad times,” and that their necessity is increasing. In the piece published the following day, he argues not for an abstract notion of “crypto regulation,” but for “regulated crypto,” where entities such as companies and exchanges can obtain licenses, and he clearly describes building mechanisms to onboard institutions. If you map this context onto Flying Tulip, the goal is not “winning in unregulated free competition,” but “redesigning on-chain market structure into a form that capital entering after regulation matures can adopt.” Flying Tulip itself explicitly states that it is targeting an “institutional-grade market structure.”
The mercurial "Godfather of DeFi" is now pivoting to compliant crypto after abruptly quitting decentralized finance in early March.
Hyperliquid has a powerful presence in on-chain perpetual futures, with approximately $58.17M in revenue observed over the most recent 30 days. In other words, “absorbing derivatives demand on-chain” is already proven. By contrast, what Flying Tulip emphasizes is not going head-to-head to steal share through a trader-experience arms race, but building a receptacle for “supervised capital” that increases as regulation tightens. While both share the commonality of “on-chain derivatives,” Flying Tulip foregrounds “explainability”—through redemption rights, capital allocation design, and integrated risk management. As a result, rather than chasing the short-term, high-turnover trading pie, it is more likely to be positioned toward the pie constrained by regulatory requirements.
On the regulatory front, MiCA in the EU has entered its full-application phase, and timelines such as transition measures for existing providers (up to 18 months) have made “deadlines for compliance” concrete. In such a phase, barriers for institutions to participate in crypto can decline, while infrastructure providers are required to meet explicit design requirements. On the market front, derivatives demand is expanding. CoinGecko’s annual report states that in 2025, CEX perpetual volume reached $86.2 trillion, while DEX perpetual volume reached $6.7 trillion. What matters here is that on-chain derivatives are shifting from a niche into a segment of a massive market. The more regulatory readiness progresses, the more the next wave of participants will be those with large capital but heavy constraints—and Flying Tulip’s design philosophy is aimed at that cohort.
The crypto market underwent a sharp -23.7% correction in 2025 Q4, though trading volumes surged as volatility spiked.
Going forward, what will determine whether Flying Tulip can truly build broad support is not narrative, but verifiable specifics: how far the specifications for redemption rights and reserves are finalized; how they are audited; under what conditions they can be changed; how far the system can be offered in practice given jurisdiction-by-jurisdiction regulatory interpretations; and how the system behaves under market stress (liquidations, reserves, liquidity). As these become clearer, it will become possible to judge whether Flying Tulip can genuinely earn sustained adoption.
Disclaimer: This article is for informational purposes only and does not constitute a solicitation or recommendation to buy, sell, hold, or invest in any specific cryptocurrency (token). The content is based on publicly available information and reflects the author's organization and views (including estimations). Cryptocurrencies carry significant risks, including price volatility, liquidity issues, regulatory changes, and technical flaws, which may result in substantial loss of principal.
No comments yet