Author: Ash
Translation: TechFlow
@CurveFinance founder @newmichwill is launching @yieldbasis,
a Bitcoin AMM liquidity platform without impermanent loss (Editor’s note: IL, impermanent loss, refers to the potential loss a liquidity provider may suffer when providing funds to an AMM, compared to simply holding the tokens);
Meanwhile, @yearnfi founder and DeFi legend @AndreCronjeTech is building @flyingtulip_, a unified AMM+CLOB (Editor’s note: Automated Market Maker + Central Limit Order Book, where AMM provides continuous liquidity and automatic pricing, and CLOB offers more precise price discovery and order execution) exchange.
Two different approaches, tackling the same problem—how to make on-chain liquidity truly effective:
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Yield Basis ($YB): A Curve-native AMM that eliminates impermanent loss for BTC liquidity providers by maintaining a constant 2x leveraged BTC-crvUSD liquidity pool (the LP’s value remains 1:1 with BTC while earning trading fees). Users can mint ybBTC (yield-bearing BTC).
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Flying Tulip ($FT): An on-chain unified exchange (including spot, lending, perpetual contracts, options, and structured yield), based on a volatility-aware hybrid AMM+CLOB architecture, combined with a slippage-aware lending mechanism, and ftUSD (a Delta-neutral USD equivalent) as the core incentive.
Yield Basis
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Traditional AMMs force BTC liquidity providers to sell when prices rise or buy when prices fall (√p exposure, Editor’s note: market risk exposure measured in square root of price units), resulting in impermanent loss that often exceeds the fees earned from providing liquidity.
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The specific mechanism of Yield Basis will be detailed later, but the core is: users deposit BTC into the platform, the protocol borrows an equivalent amount of crvUSD, forming a 50/50 BTC-crvUSD Curve liquidity pool, and operates with 2x compounded leverage.
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A re-leveraged AMM and virtual pool keep the debt approximately equal to 50% of the liquidity pool’s value; arbitrageurs profit by maintaining constant leverage.
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This allows the value of the liquidity pool to change linearly with BTC, while also earning trading fees.
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Liquidity providers hold ybBTC, a yield-bearing BTC receipt token that automatically compounds trading fees denominated in BTC.
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The platform also offers a governance token $YB, which can be locked as veYB for voting (e.g., to choose liquidity pool reward allocations).
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Yield Basis is mainly aimed at BTC holders who want to unlock productive BTC and earn fees in a protocol that solves the impermanent loss problem.
Flying Tulip
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The user experience and risk settings of traditional decentralized exchanges (DEXs) are usually static. Flying Tulip aims to bring CEX-level tools on-chain by adjusting the AMM curve based on volatility and the loan-to-value (LTV) of lending based on actual execution/slippage.
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Its AMM adjusts curvature according to measured volatility (EWMA)—flattening (approaching constant sum) during low volatility to compress slippage and impermanent loss; and becoming more product-like during high volatility to avoid liquidity exhaustion.
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ftUSD tokenizes Delta-neutral liquidity pool positions, and is used for incentive mechanisms and liquidity programs.
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The platform token $FT may be used for revenue buybacks, incentives, and liquidity programs.
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Flying Tulip is a DeFi super app: an exchange supporting spot, lending, perpetual contracts, and options simultaneously.
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Execution quality depends on accurate volatility/impact signals and robust risk controls under stress conditions.
Project Outlook
Yield Basis aims to become the platform for BTC liquidity; Flying Tulip is committed to being the platform for all on-chain native trading. In the current era where perpetual DEXs are mainstream, the launch of Flying Tulip is timely. Frankly, if it can deliver optimal execution, Flying Tulip could even channel future BTC flows into pools like YB. If Yield Basis succeeds, ybBTC could become the “stETH” primitive for Bitcoin: BTC exposure + LP trading fees, with no impermanent loss. Flying Tulip has the potential to launch its integrated stack, giving users access to CEX-level tools; attempting “one-stop trading, covering all of DeFi.” While there is cautious optimism for both projects, it should not be overlooked that these OG founders and top teams’ projects remain untested, and the founders must also balance the development of other protocols (such as Curve and Sonic).
The above image was compiled by TechFlow as follows:
