The godfather of DeFi makes a powerful return! Curve founder eliminates Impermanent Loss, Andre Cronje creates the "ultimate exchange".

The cryptocurrency market welcomes the heavyweight new projects from two of the most influential innovators in the DeFi space. Yield Basis, launched by Curve Finance founder Michael Egorov, promises to completely eliminate the impermanent loss troubles faced by Bitcoin liquidity providers, while "DeFi God" Andre Cronje is building Flying Tulip, a super platform that integrates all trading functions. These two projects not only represent the latest breakthroughs in DeFi technology but may also redefine the future landscape of decentralized trading.

Yield Basis: Bitcoin's 'stETH' Moment Has Arrived

Michael Egorov (@newmichwill), as the founder of Curve Finance, has fundamentally changed the way stablecoin trading is done in Decentralized Finance. Now, he is bringing this spirit of innovation into the Bitcoin space, addressing the Impermanent Loss issue that has plagued AMM Liquidity Providers for years through the Yield Basis ($YB) project.

In the traditional Automated Market Maker (AMM) model, Liquidity Providers face a fundamental problem: when asset prices rise, they are effectively selling these assets; when prices fall, they are buying back. This mechanism leads to Impermanent Loss, which often outweighs the trading fees earned from providing liquidity, making liquidity provision economically less attractive.

This issue is particularly prominent for Bitcoin holders. Many people want to generate returns on their BTC but are unwilling to bear the risk of Impermanent Loss, resulting in a large amount of Bitcoin assets being idle and not fully participating in the Decentralized Finance ecosystem.

Revolutionary Solution of Yield Basis

Yield Basis proposes a clever solution: by creating a 2x leveraged BTC-crvUSD liquidity pool, it maintains a linear relationship of 1:1 between the value of liquidity providers and Bitcoin, while also earning trading fees.

The specific mechanism is as follows:

User Deposit BTC: Deposit Bitcoin into the Yield Basis platform

Agreement to Borrow crvUSD: The system automatically borrows an equivalent amount of crvUSD stablecoin.

Create a Leveraged Liquidity Pool: Form a 50/50 ratio BTC-crvUSD Curve liquidity pool

Automatic Rebalancing: Maintain debt approximately equal to 50% of the value of the liquidity pool through re-leveraged AMM and virtual pools.

Arbitrage Mechanism: Arbitrageurs profit by maintaining constant leverage to ensure system stability.

Issuance of ybBTC: Users receive ybBTC tokens, representing their share in the system.

The core advantage of this design is that the value of the liquidity pool changes linearly with the price of BTC, eliminating impermanent loss, while liquidity providers can also earn trading fees. ybBTC, as a yield-bearing BTC receipt token, automatically compounds trading fees priced in BTC, providing holders with continuously growing returns.

If Yield Basis successfully realizes its vision, ybBTC is expected to become the "stETH" of the Bitcoin world—a token that retains exposure to the original asset, generates yield automatically, and has no Impermanent Loss. This will provide Bitcoin holders with a brand new way to utilize their assets, potentially unlocking a significant amount of currently idle BTC into the DeFi ecosystem.

Flying Tulip: Andre Cronje's DeFi super application

Meanwhile, another DeFi legend, Andre Cronje (@AndreCronjeTech), is building an ambitious new project. As the founder of Yearn Finance, Cronje is known for its innovative DeFi products and mystical "build-exit-return" style. His new project, Flying Tulip ($FT), aims to create a unified trading platform that integrates the advantages of AMM and the Central Limit Order Book (CLOB).

Traditional decentralized exchanges (DEX) face the problem of static user experience and risk settings, which cannot be dynamically adjusted according to market conditions. This leads to the potential for liquidity to quickly dry up in a highly volatile market environment, resulting in increased trading slippage and a significant decline in user experience.

The goal of Flying Tulip is to bring a centralized exchange (CEX) level trading experience on-chain, achieving this through a series of innovative mechanisms.

The core of Flying Tulip lies in its volatility-sensitive hybrid AMM+CLOB architecture, combined with a slippage-sensitive lending mechanism:

Dynamic AMM Curve: Automatically adjusts AMM curvature based on measured volatility (EWMA)

Low Volatility Period: The curve tends to flatten (approaching constant), compressing slippage and Impermanent Loss.

High Volatility Period: The curve exhibits more product characteristics, preventing Liquidity depletion.

Slippage Aware Lending: Adjusts the loan-to-value ratio (LTV) based on actual execution conditions and slippage dynamics.

ftUSD Incentive Mechanism: Tokenized Delta Neutral Liquidity Pool Positions for Incentives and Liquidity Plans

Fully Functional Trading Platform: Supports spot trading, lending, perpetual contracts, options, and structured yields simultaneously.

The vision of Flying Tulip is to become a true DeFi super application, a platform that meets all trading needs of users. This "one-stop trading, covering all DeFi" approach, if successfully realized, will greatly simplify the user experience and improve capital efficiency.

Market Impact and Outlook of the Two Major Projects

Although these two projects adopt different approaches, they are both committed to solving the same core issue: how to make on-chain Liquidity truly efficient. Their success will have a profound impact on the entire DeFi ecosystem.

Yield Basis focuses on becoming the preferred platform for BTC liquidity. If its impermanent loss solution proves effective, it may:

Release a large amount of idle BTC: Attract conservative Bitcoin holders to participate in DeFi

Create New Bitcoin Derivatives: ybBTC may become a new underlying asset for further Decentralized Finance innovations.

Increase the Usage of BTC in DeFi: Enhance the connection between Bitcoin and the Ethereum ecosystem.

The vision of the unified trading platform of Flying Tulip, if realized, will:

Changing the DEX Competitive Landscape: Providing a CEX-level trading experience may attract more institutional users.

Improve Capital Efficiency: The unified platform allows for more efficient capital utilization.

Simplify User Experience: Reduce the need for users to switch between different protocols.

In the current era where perpetual contract decentralized exchanges (Perp DEX) have become mainstream, the launch of Flying Tulip seems timely. If it can provide the best execution results, it may even guide future BTC flow to funding pools similar to Yield Basis, creating a synergistic effect.

Potential Challenges and Risks

Despite being led by top founders in the DeFi space, investors and users should remain cautious:

Untested Innovations: Both projects have introduced complex new mechanisms that may carry unknown risks.

Founders Distracted: Both founders have other important projects (such as Curve and Sonic) that require attention.

Market Acceptance: Innovative concepts take time to be understood and accepted by the market.

Competitive Pressure: The DeFi space is highly competitive, and similar solutions may emerge rapidly.

Conclusion: The Return of DeFi Pioneers Signals a New Phase for the Industry

Michael Egorov and Andre Cronje, two veteran figures in the DeFi space, are launching new projects simultaneously, which not only showcases their ongoing passion and innovative capabilities in the industry but may also signify that DeFi is entering a new stage of development.

The Impermanent Loss solutions of Yield Basis and the unified trading platform of Flying Tulip represent the core principles of DeFi 2.0: enhancing capital efficiency, improving user experience, and lowering participation barriers. These innovations could become key catalysts driving the next wave of DeFi growth.

For investors and users, this is a moment full of opportunities but also requires caution. On one hand, early participation in these innovative projects may bring substantial returns; on the other hand, new technologies always come with unknown risks.

Regardless, the launch of Yield Basis and Flying Tulip has undoubtedly injected new vitality and imagination into the DeFi space, making it worthy of close attention from all crypto assets enthusiasts.