Andre Cronje's Flying Tulip Raises $200M with Perpetual Put Protection for Investors

DeFi pioneer Andre Cronje has raised $200 million in seed funding for Flying Tulip, a full-stack decentralized exchange project that features an unconventional fundraising structure giving investors perpetual downside protection while maintaining unlimited upside potential.

The private round values Flying Tulip's FT token at a $1 billion fully diluted valuation, with the project now planning to raise up to another $800 million through a public token sale at the same valuation, Cronje told The Block . The seed round closed within a month after opening August 14, with no single lead investor.

Participants included Brevan Howard Digital, CoinFund, DWF Labs, FalconX, Hypersphere, Lemniscap, Nascent, Republic Digital, Selini, Sigil Fund, Susquehanna Crypto, Tioga Capital, and Virtuals Protocol, among others.

The distinctive feature of the raise is an "onchain redemption right" that allows all investors in both private and public rounds to burn FT tokens at any time to redeem their original principal in the asset they contributed, such as ETH. The perpetual put option never expires, providing a guaranteed floor for investors.

"The [perpetual] put means none of these funds can be used, so actual raised is [zero]," Cronje said. Instead, the project plans to deploy up to $1 billion of potential raised capital into onchain yield strategies via protocols including Aave, Ethena, and Spark. With approximately 4% annual yield targets, that pool could generate roughly $40 million per year to fund operations, incentives, and token buybacks.

The model represents a fundamental rethinking of token-based capital formation. Rather than treating raised funds as operational capital, Flying Tulip uses the treasury as a yield-generating base while the put option remains active. Investors effectively forgo the 4% yield they could earn directly deploying into DeFi protocols, gaining instead exposure to FT token upside backed by principal protection.

"As a founder who has been involved in two large token projects; Yearn and Sonic, I know the pressures from a token," Cronje wrote in his pitch deck. "The token itself is a product. If the price ever dips below where investors joined, this leads to short term decision making choices that might benefit the token at the cost of the protocol."

The structure aims to address a chronic problem in crypto fundraising: tokens that serve primarily as capital-raising mechanisms often fade into irrelevance after initial bootstrapping phases. By guaranteeing principal redemption while using treasury yield for operations, Flying Tulip attempts to sustain development until product revenues can support the business independently.

Lemniscap, one of the participating investors, described the model as addressing the challenge of competing against well-capitalized DeFi incumbents. "Going head-to-head with DeFi's giants is a daunting task. They are better capitalised, with strong recurring revenues and large teams that operate at a different capacity than lean startups," the firm wrote in a blog post announcing its participation.

The fundraising structure includes deflationary mechanics designed to create sustained token demand. Revenue from treasury yield will split between operating expenses and FT token buybacks, with protocol fees adding another buyback stream as products launch. Critically, if investors sell FT tokens on secondary markets, their put option is invalidated and their original capital moves to the foundation for buyback and burn operations.

"Selling doesn't just remove an investor's protection, it actively strengthens the token's deflationary mechanics," Lemniscap noted.

Redemptions will be managed through audited smart contracts with safeguards including queues and rate limits to protect solvency. If reserves are temporarily insufficient, redemption requests enter a transparent queue and process as capital replenishes. FT tokens remain non-transferable until the public sale completes.

Team members receive no initial token allocation. Instead, compensation comes from scheduled open-market buybacks funded by protocol revenue, tying team upside directly to product performance.

Flying Tulip plans to build what Cronje describes as a comprehensive onchain exchange integrating spot trading, derivatives, lending, money markets, a native stablecoin (ftUSD), and onchain insurance into a single cross-margin system.

"It isn't 'a DEX,'" Cronje said. "It's a ground-up rebuild of lending, trading, AMM [automated market maker], CLOB [central limit order book], derivatives, insurance, and stablecoins, each with their own unique innovations."

The project builds on Deriswap, a concept Cronje introduced in 2020 to merge multiple DeFi functions into one platform. At launch, Flying Tulip will support Ethereum, Avalanche, BNB Chain, Sonic, and Solana, with additional networks planned. The initial rollout will be hardened on Sonic, where fee monetization and subsidies allow zero-fee trading before full deployment to other chains.

Cronje cited competitors ranging from Coinbase and Binance at the holistic level to protocol-specific rivals including Ethena, Hyperliquid, Aave, and Uniswap. The project currently employs approximately 15 people across the U.S., Europe, and Asia, with active hiring underway.

Launch timing remains undefined, with Cronje describing it as "sooner than people think, later than people hope." The ambitious scope encompasses multiple DeFi primitives that typically require years of development and testing before production deployment.

The fundraising model itself represents an experiment with significant questions about viability. The structure requires effectively managing a large treasury, sustaining yields amid changing DeFi market conditions, and delivering a competitive product suite across multiple complex categories. Investors forgo direct yield opportunity in exchange for token upside, a tradeoff only justified if the project succeeds.

"Flying Tulip is not a risk-free bet; it's an original one," Lemniscap wrote. "For this fundraising primitive to succeed, below ingredients matter the most: The ability to raise large amounts of capital, usually anchored by a key person or team with the reputation, influence, and trust to attract it. A sufficiently established product suite that actually warrants the scale of bootstrapping."

Cronje brings significant reputation capital from previous projects including Yearn Finance and Sonic (formerly Fantom). His track record of introducing novel DeFi primitives provides credibility, though his projects have also generated controversy within the crypto community.

The public sale hosted on Flying Tulip's own platform rather than existing ICO infrastructure will test whether the perpetual put model can attract retail participation at the $1 billion valuation established in the private round. The 100% investor allocation at launch, with no team or foundation supply, creates unusual early market dynamics that could drive volatility as limited float meets persistent buyback demand.