In previous cycles, Andre Cronje, the founder of the Sonic (formerly Fantom) public blockchain, was known as the "King of DeFi". Now, this former king has returned, bringing a new financing paradigm to the crypto market. In the current extremely cautious market environment, Flying Tulip completed a seed round of financing of approximately $200 million last month and plans to raise another $800 million through a public offering, expanding its total fundraising to a valuation of $1 billion. How did you do that? AC's latest project, Flying Tulip, is positioned as a "full-stack on-chain financial market," aiming to integrate spot trading, lending, and perpetual contracts through a unified risk and pricing model. Technically, it emphasizes a hybrid AMM (Automated Market Maker) + order book, volatility-adjusted lending, and cross-chain support. To put it more bluntly, the goal is to reuse the "same unit of collateral" across different functions in order to improve capital efficiency. The most innovative aspect of this project is its reversible financing mechanism, namely "non-consumable financing," which mainly includes: On-chain redemption right: Flying Tulip's financing structure includes an "on-chain redemption right" mechanism (meaning investors can redeem their original investment by burning tokens under certain conditions). All private and public investors have a redemption right that can be exercised at any time (similar to a perpetual put option), and can redeem the original investment amount, achieving an asymmetric return structure of "limited downside and potential upside". Redemption mechanism: Executed through audited smart contracts, with rate limits and a queuing system to ensure solvency. Funding Deployment: The funds raised will not be spent directly, but will be invested in protocols such as Aave, Ethena, and Spark to generate an annualized return of approximately 4%. Cash flow arrangement: Part of the funds will be invested in low-risk DeFi strategies or structured products, with the yield covering operating expenses and redemption needs. Risk isolation: Redemption reserves are separated from operating funds to ensure security. This model keeps the financing funds intact, using the returns to support operations, thus maintaining the project's operation "with returns rather than principal". In terms of incentives, FT's team incentive model innovates or references the practices of leading decentralized trading platform HyperLiquid, and proposes incentive methods and buyback mechanisms based on this: Zero initial allocation: The team does not receive an initial token allocation, but earns revenue through open market buybacks funded by protocol revenue. Revenue-linked: Team earnings depend entirely on the actual use and long-term performance of the protocol. Continuous buyback: All revenue sources (transaction fees, lending spreads, stablecoin yields, etc.) are used to buy back and burn tokens. Open and transparent: The buyback program will have a clear timetable, avoiding the opaque token releases of traditional projects. Fixed supply and deflationary mechanism: The total supply of FT is capped at 10 billion tokens, with 10 tokens corresponding to every 1 US dollar of collateral. There is no inflation, and the token scarcity and holder value are continuously increased through the deflationary mechanism. The essence of this financing is that investors purchase a long-term put option that allows them to redeem their principal at any time, while the project team supports its operations with low-risk DeFi yields. In other words, in this investment, investors can exchange their tokens back to their original investment in US dollars (or equivalent stablecoins) at any time. The $200 million raised is locked in low-risk DeFi yield strategies (such as Aave, Ethena, and Spark), generating an annualized yield of approximately 4%. This means that for every $1 billion raised, approximately $40 million in yield can be generated annually to cover the project's operating expenses. This allows the raised funds to serve as initial capital, not to be consumed, but only to be used to maintain the project's operation through the passive income generated. The project's sustainability depends on the platform generating revenue to achieve long-term self-sufficiency. For investors, participating in financing involves paying the opportunity cost of using the funds. This model is a key innovation that distinguishes the project from traditional financing methods. It allows investors to only bear the opportunity cost; however, in a bull market, this form of financing, which may experience slow early development, could lead to some funds being redeemed in pursuit of higher returns. Currently, institutions that have announced or are rumored to be investors include: Brevan Howard Digital, CoinFund, DWF Labs, FalconX, Hypersphere, Lemniscap, Nascent, Republic Digital, etc. For projects, this approach establishes a sustainable funding pool and stable cash flow. In the future, if other projects wish to attract institutional funding, they may also need to offer similar principal protection and return-linked mechanisms, tying team earnings to platform usage to prevent early sell-offs. This will drive the industry towards a financing model based on "revenue buybacks" and "performance alignment." Regardless, the interests of original investors typically take precedence over those of secondary market buyers and the team, a principle emphasized in the mechanism design. This model has the potential to reshape the funding standards of the crypto primary market, providing investors with a stronger margin of safety and sustainability. Admittedly, the success of a project ultimately depends on whether its core product can prevail in fierce market competition. Even though this requires time to verify, we still expect it to generate a positive flywheel effect. This model may be setting a new and higher starting point for subsequent startups.In previous cycles, Andre Cronje, the founder of the Sonic (formerly Fantom) public blockchain, was known as the "King of DeFi". Now, this former king has returned, bringing a new financing paradigm to the crypto market. In the current extremely cautious market environment, Flying Tulip completed a seed round of financing of approximately $200 million last month and plans to raise another $800 million through a public offering, expanding its total fundraising to a valuation of $1 billion. How did you do that? AC's latest project, Flying Tulip, is positioned as a "full-stack on-chain financial market," aiming to integrate spot trading, lending, and perpetual contracts through a unified risk and pricing model. Technically, it emphasizes a hybrid AMM (Automated Market Maker) + order book, volatility-adjusted lending, and cross-chain support. To put it more bluntly, the goal is to reuse the "same unit of collateral" across different functions in order to improve capital efficiency. The most innovative aspect of this project is its reversible financing mechanism, namely "non-consumable financing," which mainly includes: On-chain redemption right: Flying Tulip's financing structure includes an "on-chain redemption right" mechanism (meaning investors can redeem their original investment by burning tokens under certain conditions). All private and public investors have a redemption right that can be exercised at any time (similar to a perpetual put option), and can redeem the original investment amount, achieving an asymmetric return structure of "limited downside and potential upside". Redemption mechanism: Executed through audited smart contracts, with rate limits and a queuing system to ensure solvency. Funding Deployment: The funds raised will not be spent directly, but will be invested in protocols such as Aave, Ethena, and Spark to generate an annualized return of approximately 4%. Cash flow arrangement: Part of the funds will be invested in low-risk DeFi strategies or structured products, with the yield covering operating expenses and redemption needs. Risk isolation: Redemption reserves are separated from operating funds to ensure security. This model keeps the financing funds intact, using the returns to support operations, thus maintaining the project's operation "with returns rather than principal". In terms of incentives, FT's team incentive model innovates or references the practices of leading decentralized trading platform HyperLiquid, and proposes incentive methods and buyback mechanisms based on this: Zero initial allocation: The team does not receive an initial token allocation, but earns revenue through open market buybacks funded by protocol revenue. Revenue-linked: Team earnings depend entirely on the actual use and long-term performance of the protocol. Continuous buyback: All revenue sources (transaction fees, lending spreads, stablecoin yields, etc.) are used to buy back and burn tokens. Open and transparent: The buyback program will have a clear timetable, avoiding the opaque token releases of traditional projects. Fixed supply and deflationary mechanism: The total supply of FT is capped at 10 billion tokens, with 10 tokens corresponding to every 1 US dollar of collateral. There is no inflation, and the token scarcity and holder value are continuously increased through the deflationary mechanism. The essence of this financing is that investors purchase a long-term put option that allows them to redeem their principal at any time, while the project team supports its operations with low-risk DeFi yields. In other words, in this investment, investors can exchange their tokens back to their original investment in US dollars (or equivalent stablecoins) at any time. The $200 million raised is locked in low-risk DeFi yield strategies (such as Aave, Ethena, and Spark), generating an annualized yield of approximately 4%. This means that for every $1 billion raised, approximately $40 million in yield can be generated annually to cover the project's operating expenses. This allows the raised funds to serve as initial capital, not to be consumed, but only to be used to maintain the project's operation through the passive income generated. The project's sustainability depends on the platform generating revenue to achieve long-term self-sufficiency. For investors, participating in financing involves paying the opportunity cost of using the funds. This model is a key innovation that distinguishes the project from traditional financing methods. It allows investors to only bear the opportunity cost; however, in a bull market, this form of financing, which may experience slow early development, could lead to some funds being redeemed in pursuit of higher returns. Currently, institutions that have announced or are rumored to be investors include: Brevan Howard Digital, CoinFund, DWF Labs, FalconX, Hypersphere, Lemniscap, Nascent, Republic Digital, etc. For projects, this approach establishes a sustainable funding pool and stable cash flow. In the future, if other projects wish to attract institutional funding, they may also need to offer similar principal protection and return-linked mechanisms, tying team earnings to platform usage to prevent early sell-offs. This will drive the industry towards a financing model based on "revenue buybacks" and "performance alignment." Regardless, the interests of original investors typically take precedence over those of secondary market buyers and the team, a principle emphasized in the mechanism design. This model has the potential to reshape the funding standards of the crypto primary market, providing investors with a stronger margin of safety and sustainability. Admittedly, the success of a project ultimately depends on whether its core product can prevail in fierce market competition. Even though this requires time to verify, we still expect it to generate a positive flywheel effect. This model may be setting a new and higher starting point for subsequent startups.