Flying Tulip’s marketplace for NFT-wrapped perpetual put options has processed more than $5 million in trading volume, according to founder Andre Cronje.
Cronje said on October 5 that the platform had crossed the milestone as activity increased around positions known as ftPUTs, which combine FT tokens with redemption rights tied to the capital backing those positions.
The structure was initially made available to participants in Flying Tulip’s original token sale. Holders received ftPUT positions that allow them to retain certain capital-protection features while holding FT tokens.
The marketplace enables investors to sell these NFT-wrapped positions without giving up the associated redemption rights. This differs from simply withdrawing the FT tokens from the position, which permanently removes the redemption protection attached to the withdrawn amount.
Buying FT on the open spot market does not automatically provide access to a perpetual put. By contrast, purchasing an ftPUT transfers both the remaining FT tokens held within the NFT and the associated claim on the capital backing the position.
“There are many financial and non-financial instruments that only make sense as NFTs,” Cronje said.
How ftPUT positions work
Each ftPUT is structured as an ERC-721 NFT that records the amount of FT remaining in the position as well as the collateral associated with it.
A holder can keep the position open, redeem some or all of the backing capital, or withdraw FT tokens to trade independently.
If the holder redeems the backing capital, the corresponding amount of FT inside the position is burned. If FT is withdrawn instead, the redemption right linked to that portion is permanently cancelled.
The redemption mechanism is designed to return the original asset and amount contributed to the position. It does not guarantee a fixed dollar value and does not reimburse whatever price a secondary-market buyer may have paid for the NFT.
Flying Tulip says the redemption right does not expire. The contributed assets are deployed into onchain yield strategies while the position remains active.
Secondary market prices can exceed backing value
Recent marketplace activity highlights the difference between the value of the underlying backing capital and the price buyers may be willing to pay for an ftPUT.
One position, identified as P7571, was sold on October 5 for 149,000 USDT before fees, despite carrying backing capital of approximately 94,229 USDT.
The related Ethereum transaction showed a buyer payment of around 149,447 USDT, including the applicable taker fee.
The transaction illustrates that secondary-market prices can trade at a premium to the underlying redemption value, depending on market expectations and demand for the position.
Marketplace includes settlement protections
Flying Tulip’s marketplace includes checks designed to ensure that a position’s collateral and remaining FT balances have not changed between the time a buyer evaluates the NFT and when the transaction settles.
This mechanism is intended to prevent sellers from withdrawing assets after a buyer has already priced the position.
However, the protection does not prevent buyers from paying more than the economic value of the redemption claim.
Flying Tulip also highlights several risks associated with the structure. Its documentation notes that large numbers of simultaneous redemptions could slow settlement times.
The project also warns that the onchain yield strategies used to deploy backing capital carry risks related to smart contracts, validators and broader blockchain infrastructure.
As trading activity increases, the ftPUT marketplace is emerging as one of the more unusual examples of how NFTs can be used to represent complex financial positions rather than digital collectibles alone.
