Flying Tulip's marketplace for tokenized perpetual put options has recorded more than $5 million in cumulative trades, founder Andre Cronje said in an Oct. 5 post on X.

The platform wraps put positions in ERC-721 NFTs known as ftPUTs, letting holders of the protocol's FT token transfer positions along with their embedded redemption rights — a structural feature unavailable to buyers acquiring the asset on spot markets. The mechanism matters because the redemption right is what gives an ftPUT its put-like payoff: the ability to recover contributed capital rather than rely on the token's secondary-market price.

"Buying an ftPUT transfers the remaining wrapped tokens and the claim on their backing capital," Flying Tulip's marketplace documentation states. The NFT form is deliberate, Cronje wrote, because some instruments only work as transferable claims rather than fungible balances. "There are many financial and non-financial instruments that only make sense as NFTs," he said.

What is an ftPUT?

ftPUTs are ERC-721 tokens that record a position's remaining FT balance and its collateral. Holders can keep the position open, redeem some or all of the backing capital, or withdraw FT to trade separately on the open market.

Redeeming burns the corresponding tokens inside the position; withdrawing FT permanently cancels the redemption right on that portion, according to the project's documentation. The redemption right returns the original contributed asset and amount — not a guaranteed dollar value or the price a secondary buyer paid.

Flying Tulip's capital-allocation documents say the right carries no expiration and that contributed assets are deployed into onchain yield strategies while the position remains open. That means a position can sit indefinitely while the backing earns yield, and the holder retains the option to redeem against the original principal.

How does the marketplace settle trades?

Before a purchase settles, the marketplace verifies that a position's collateral and remaining balances have not changed. That check prevents a seller from withdrawing assets after a buyer has priced the position. It does not protect against overpaying.

A trade on Oct. 5 illustrates the gap between purchase price and backing. Flying Tulip's transaction dashboard records position P7571 selling for 149,000 USDT before fees, against 94,229.43 USDT in backing capital. The linked Ethereum transaction confirms the NFT transfer and a buyer payment of 149,447 USDT, including the taker fee.

What risks remain?

The project's documentation warns that synchronized redemptions can slow settlement and that the underlying yield strategies carry smart-contract and validator risks. Positions also depend on the continued operation of the onchain strategies holding backing capital and on the redemption queue processing contributed assets back into users' hands.

Original token-sale buyers received ftPUTs when FT began trading in February. The Defiant reported at launch that FT trades were running near a $1 billion fully diluted valuation. The marketplace now offers a venue to exit positions while preserving the claim, a market-structure shift that will draw scrutiny each time the gap between accrued yield on backing capital and the token's secondary-market price widens.