DeFi veterans' new projects: Curve founder launches BTC pool, AC aims to build an all-in-one exchange

2025.09.29

DeFi veterans' new projects: Curve founder launches BTC pool, AC aims to build an all-in-one exchange

Addressing the on-chain liquidity challenge.

2025.09.29 - 07:02:39

DeFi

Navigating Web3 tides with focused insights

Addressing the on-chain liquidity challenge.

Author: Ash

Compiled by: TechFlow

The founder of @CurveFinance, @newmichwill, is launching @yieldbasis, a Bitcoin AMM liquidity platform with no impermanent loss (TechFlow note: IL, or impermanent loss, refers to the potential loss liquidity providers suffer when supplying funds to an AMM compared to simply holding the tokens);

Meanwhile, @yearnfi's founder and DeFi legend @AndreCronjeTech is building @flyingtulip_, a unified AMM+CLOB (TechFlow note: Automated Market Maker + Central Limit Order Book, where AMM provides continuous liquidity and automated pricing, while CLOB enables more precise price discovery and order execution) exchange.

Two different approaches tackling the same challenge—how to make on-chain liquidity truly effective:

Yield Basis ($YB): A Curve-native AMM that eliminates impermanent loss for BTC liquidity providers by maintaining a constant 2x leveraged BTC-crvUSD liquidity pool (LP value moves 1:1 with BTC while earning trading fees). Users can mint ybBTC (yield-bearing BTC).
Flying Tulip ($FT): An on-chain unified exchange (covering spot, lending, perpetuals, options, and structured yields) based on a volatility-aware hybrid AMM+CLOB architecture, combined with slippage-sensitive lending mechanisms and ftUSD (a delta-neutral dollar equivalent) at the core of its incentive system.

Yield Basis

Traditional AMMs force BTC liquidity providers to sell during price increases or buy during declines (√p exposure, TechFlow note: market risk exposure measured in terms of the square root of price), resulting in impermanent losses that often exceed earned fees.
The specific mechanism of Yield Basis will be detailed later, but the core idea is: users deposit BTC into the platform, the protocol borrows an equivalent amount of crvUSD, forming a 50/50 BTC-crvUSD Curve liquidity pool operating with 2x compounded leverage.
A re-leveraging AMM and virtual pool maintain debt at approximately 50% of the liquidity pool's value; arbitrageurs profit by keeping leverage constant.
This allows the liquidity pool’s value to move linearly with BTC while earning trading fees.
Liquidity providers hold ybBTC, a yield-bearing BTC receipt token that automatically compounds trading fees denominated in BTC.
The platform also offers a governance token $YB, which can be locked as veYB for voting (e.g., selecting reward allocations for liquidity pools).
Yield Basis primarily targets BTC holders who want to unlock productive BTC within protocols that solve impermanent loss and earn fees.

Flying Tulip

Traditional decentralized exchanges (DEXs) typically offer static user experiences and risk parameters. Flying Tulip aims to bring centralized exchange (CEX)-grade tools on-chain by dynamically adjusting AMM curves based on volatility and loan-to-value (LTV) ratios in lending based on actual execution/slippage.
Its AMM adjusts curvature based on measured volatility (EWMA)—flatter (closer to constant sum) during low volatility to reduce slippage and impermanent loss, and more product-based during high volatility to prevent liquidity depletion.
ftUSD tokenizes delta-neutral liquidity pool positions and serves as the foundation for incentives and liquidity programs.
The platform token $FT may be used for revenue buybacks, incentives, and liquidity initiatives.
Flying Tulip is a DeFi super app: an exchange supporting spot, lending, perpetuals, and options all in one.
Execution quality depends on accurate volatility/impact signals and robust risk controls under stress conditions.

Outlook for Both Projects

Yield Basis aims to become the platform for BTC liquidity; Flying Tulip strives to become the platform for all native on-chain trading. At a time when Perp DEXs dominate, Flying Tulip's launch appears timely. Frankly, if it delivers optimal execution, Flying Tulip could even route future BTC volume toward pools like YB. If Yield Basis succeeds, ybBTC might become the "stETH" primitive for Bitcoin: BTC exposure + LP fees without impermanent loss. Flying Tulip has the potential to roll out an integrated stack giving users CEX-grade tools, pursuing the vision of "one-stop trading for all DeFi." While cautiously optimistic about both projects, it's important to note that these OG founders and top-tier teams remain unproven in this new context, and the founders must also balance development across other protocols (such as Curve and Sonic).