Decentralized Finance new king debuts?

Original Title: A Review of New Projects by DeFi OG: Curve Founder Builds BTC Pool, Andre Cronje Aims to Create a Universal Exchange

Original Author: Shenchao Techflow

Original source:

Reprint: Daisy, Mars Finance

The founder of Curve Finance @newmichwill is launching @yieldbasis, a Bitcoin AMM liquidity platform with no impermanent loss (Note: IL, impermanent loss, refers to the potential loss you might incur as a liquidity provider when supplying funds to an AMM compared to simply holding those tokens);

At the same time, the founder of @yearnfi, the DeFi god @AndreCronjeTech, is building @flyingtulip_, a unified AMM+CLOB (Note: Automated Market Maker + Central Limit Order Book, AMM provides continuous liquidity and automatic pricing, CLOB offers more precise price discovery and order execution) exchange).

Two different attempts to solve the same problem - how to make on-chain liquidity truly effective:

Yield Basis ($YB): A Curve native AMM that eliminates impermanent loss for BTC liquidity providers by holding a constant 2x leveraged BTC-crvUSD liquidity pool (the value of LP remains 1:1 with BTC while earning trading fees). Users can mint ybBTC (yield-bearing BTC).

Flying Tulip ($FT): A unified exchange on-chain (including spot, lending, perpetual contracts, options, and structured returns), based on a volatility-aware hybrid AMM+CLOB architecture, combined with a slippage-aware lending mechanism, and ftUSD as the incentive core (a delta-neutral dollar equivalent).

Yield Basis

Traditional AMMs allow BTC liquidity providers to sell when prices rise or buy when prices fall (√p exposure, note: market risk exposure measured in square root of price), resulting in impermanent loss often exceeding the fees earned from providing liquidity.

The specific mechanism of Yield Basis will be introduced in detail later, but the core is: users will deposit BTC into the platform, the protocol will borrow an equivalent amount of crvUSD, forming a 50/50 BTC-crvUSD Curve liquidity pool, and operate with 2x compound leverage.

A re-leveraged AMM and virtual pool will maintain debt approximately equal to 50% of the liquidity pool value; arbitrageurs profit by maintaining constant leverage.

This makes the value of the liquidity pool change linearly with BTC, while earning transaction fees.

Liquidity providers hold ybBTC, which is a yield-bearing BTC receipt token that automatically compounds transaction fees denominated in BTC.

The platform also provides a governance token $YB, which can be locked as veYB for voting (for example, to choose the distribution of liquidity pool rewards).

Yield Basis is mainly aimed at BTC holders who wish to release productive BTC and earn fees in protocols that address the issue of impermanent loss.

Flying Tulip

The user experience and risk settings of traditional decentralized exchanges (DEX) are usually static. Flying Tulip aims to bring centralized exchange (CEX) level tools on-chain by adjusting the AMM curve based on volatility and adjusting the loan-to-value ratio (LTV) of loans based on actual execution/slippage.

Its AMM adjusts curvature based on measured volatility (EWMA) — tending to flatten (close to constant product) in low volatility conditions to reduce slippage and impermanent loss; and exhibiting more product-like characteristics in high volatility conditions to avoid liquidity depletion.

ftUSD tokenized Delta neutral liquidity pool position generation, used for incentive mechanisms and liquidity programs.

The platform token $FT may be used for income buybacks, incentives, and liquidity programs.

Flying Tulip is a DeFi super application: an exchange that supports spot, lending, perpetual contracts, and options.

Execution quality relies on accurate volatility/impact signals and robust risk control under pressure.

Prospects of the Two Projects

Yield Basis hopes to become a platform for BTC liquidity, while Flying Tulip is dedicated to becoming a platform for all on-chain native transactions. In the current era where perpetual contract decentralized exchanges (Perp DEX) are mainstream, the launch of Flying Tulip is quite timely. Frankly, if it can deliver the best execution results, Flying Tulip could even direct future BTC traffic to funding pools similar to YB.

If Yield Basis is successfully implemented, ybBTC may become the "stETH" primitive of Bitcoin: BTC exposure + liquidity provider (LP) transaction fees, with no impermanent loss.

Flying Tulip has the potential to launch its integrated stack, allowing users to access tools at the level of a centralized exchange (CEX); try "one-stop trading, covering all Decentralized Finance."

While maintaining a cautiously optimistic attitude towards these two projects, it cannot be ignored that these projects led by veteran founders and top teams are still untested, and the founders also need to balance the development of other protocols, such as Curve and Sonic.