What is Tulip Protocol The Yield Aggregation Platform [Solana Series]

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Michael  0:01  

Welcome to the New To Crypto podcast designed to guide you through the crypto landscape with pinpoint accuracy created for the new and intermediate crypto investor. Join your host Crypto Travels Michael as he takes you through the different facets of getting started and succeeding in your crypto journey. New to crypto podcast brings you new episodes daily Monday through Friday with surprise bonus episodes sometimes on the weekend. Let me ask you, are you new to crypto don’t know where to start? Are you more experienced but have questions? Then you’re in the right place. This podcast is designed for you, coming at you from the training center in the lifestyle design studio. Here’s your host Crypto Travels Michael.

 

Did you know that one year ago Ethereum was $596. That’s right, under $600. Today, it’s trading at just over $4,300. So the crypto market is growing. And so is this podcast we’ve been heard and downloaded in almost 130 countries around the world. So I thank you wherever you’re tuning in and listening today. And without further ado, let’s jump into today’s episode. This is another one in the Solana series that I’m doing and this is all about Tulip protocol. So what is to the protocol? Tulip is a yield aggregator running on the Solana blockchain that offers customers auto compounding vault strategies, inheriting the advantages of the Solana blockchain, Tulip helps users increase their profits with higher annual percentage yields, token holders can lend their tokens to gain interest, enabling the leveraged yield farming feature of Tulip. Tulip optimizes the farming of your tokens doing auto compounding every hour, which generates a higher return than having them staked on Raydium, or other platforms without this functionality. So every hour Tulip reinvest what each pool has generated in order to offer its users a higher return on their investment. Tulip solves the position management problem for users on other yield generating platforms. In addition, it facilitates the farming process by offering a user friendly interface and auto compounding strategies. Tulip is one of the first yield aggregators in the Solana ecosystem, giving in a competitive advantage over other projects. So let’s break down some of the benefits and features. 

 

Well, it’s built on Solana as I mentioned earlier, and so on is a high performance permissionless blockchain based on proof of history. If you haven’t heard my episode about Solana, definitely find that episode what is Solana episode and learn all about it. And as you’re aware, I have an entire series (the Solana series) that you can also tune in and find out about many other projects from within the Solana ecosystem. Let’s break down the vaults. Tulip supports compounding vaults from Saber, Raydium and Orca, users can deposit their SPL tokens into the vault, the auto compounding strategy will do the process to harvest the rewards. And also you should know about the lending reserves: to the protocol lending reserves supports single asset deposit from many assets. The posits from these types of assets will receive a variable interest rate. Let’s break down tuassets that’s t-u-assets; when a user deposits into Tulip’s protocol lending pool, they receive a collateral token in the form of tuasset token or t-u-asset token. For example, Tu or tuUSDT, or tuSOL or tuUSDC etc. Right? This token represents your share of the lending pool and is needed to redeem your funds. This token does not necessarily have to be one to one to your deposit amount. There is no utility for this token other than redemption from Tulip protocols lending pool. So what are some of the supported protocols? Saber; users can deposit their LP tokens into the vault and the strategy will auto harvest rewards and add to LP via selling the rewards. And let’s break down the fees. Fees are taking from yield generated on compounding when the strategy runs, there are no fees charged on principal deposits. Fees are subject to change in the future based on the needs of the platform. So let’s… let’s unpack the leveraged yield farming. Leveraged yield farming up two times three supported by the Tulip platform, and the feature consists of lenders and borrowers. The lender deposits their assets to earn interest, and the borrower has to deposit collateral to leverage and borrow the yield farming.

 

So let’s break down the liquidation bot: liquidation is required when a position is unable to maintain its loan to value ratio. As a user’s collateral value decreases, and if it continues to drop in value, the risk of the user being unable to return the loan increases. Therefore liquidation is required to settle the debt and ensure the lending funds are safe, and lenders continue to feel confident to lend into the protocol to supply collateral for users to farm with. The team will be running the first liquidation bot to ensure an orderly market at launch, and to ensure positions are being liquidated in a timely manner. So who are the founders of the project will the co founders and team they’ve decided to remain anonymous. They all use aliases to identify themselves within the platform. And the two co founders use the aliases. Momo, that’s M-O-M-O, and the second one is S-E-N-X. So by the way, Tulip has its own token, and let’s break down some info about that; the Tulip token is designed to shift towards governance. Currently on chain governance is not available but once this is ready, the protocol will shift governance to token holders. This will allow holders to vote on matters such as platform fees, treasury usage, protocol improvements, pull reward waiting, you can get to it via liquidity mining programs or buy on exchanges, such as FTX, Raydium, Serum (the dex) and others. So I hope today’s episode has provided you an overview about Tulip protocol. If you like this episode, definitely like and subscribe to the podcast and chime in here tomorrow. My team and I are working hard on creating valuable content for the rest of this year and for going into the next year as well. If you’d like to reach out to me, you can email me at show@newtocrypto.io. Until tomorrow, make it a great day.

 

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By: cryptotravelsmichael
0

Table of Contents

Welcome back to another podcast episode! Today’s discussion will be around the Tulip Protocol, formally known as SolFarm. 

What Is Tulip Protocol? 

SolFarm was first released in April among a small group of DeFi enthusiasts. The name “Solana Farming Protocol” or “SolFarm” was originally derived from an acronym. 

The project had evolved from a five-vault experimental protocol to a one-stop DeFi destination with over 40 active vaults, 700 million dollars in TVL, a loan function with 200 million dollars in TVL, and leveraged farming. As the project progressed, they realized they needed a new name to match the brand’s development.

$TULIP is the native token. It’s a spin on the Middle Ages’ Tulip craze in Europe, as well as the fact that cryptocurrencies have been dubbed a Tulipmania bubble by outsiders. Tulip fields, when grown with care and effort by their growers, are a sight to behold. 

They concluded that Tulip Protocol’ would be the right link between the dApp and the token because of these characteristics and the token’s great brand awareness.

Lending 

Interest is collected on your deposits, which are lent to LYF customers. This annual percentage yield (APY) represents your yield.

Every block (5s), your interest is added to your position, but the UI only updates the overall amount when you interact with the pool. The best approach to keep track of your rewards is to keep track of how much you deposited and then visit our user interface to see how many tokens you’ll receive if you withdraw. 

The interest rate is determined by utilization; the more people who borrow, the larger the yield for the lenders. At 95%, the ability to borrow more tokens is blocked. Withdrawals are not possible at 100% because the pool is fully utilized; therefore, new persons must deposit, or LYF holdings must be canceled in order for the utilization to decline.

Untimely liquidation, in which a liquidation occurs, but there are insufficient assets to pay back lenders in full, is a risk that lenders may face. They liquidate at 85% Loan to Value, leaving a 15% cushion, which has shown to be more than adequate so far.

Leverage Yield Farming 

Rather than farming with your own money, you can borrow money from Lenders. Tulip can connect everything, allowing you to construct leveraged positions with just a few clicks, where you deposit one asset and borrow the rest from Lenders.

The most significant danger in Leveraged Yield Farming is a directional risk, which can result in liquidations, having left you with a closed position and some capital after a 5% bonus is taken. 

Because the asset you borrow creates a short position, you can create directional risk. Serum Dex is used to open positions, and therefore they have built-in systems to prevent unnecessary loss due to slippage or wide spreads. After starting a position, the equity is automatically compounded and accumulated, and you can close it or add collateral.

Tulip optimizes the farming of your tokens doing auto compounding every hour, which generates a higher return than having them staked on Raydium, or other platforms without this functionality.

- Crypto Travels Michael

Here's What We Discussed in Detail in This Interview

  • What is Tulip
  • Benefits and features
  • tuAssets
  • Founders
  • Governance

Killer Resources

HOW TO REACH TO CRYPTO TRAVELS MICHAEL

Final Thoughts

Tulip Protocol is the first Solana-based yield aggregation technology with auto-compounding vault techniques.

The decentralized application (dApp) is built to make use of Solana’s low-cost, high-efficiency blockchain, allowing vault methods to compound more frequently. Stakeholders can now benefit from greater APYs without the need for active management.

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