What is Tulip.Money and how does it work?

A few days ago, we had an article posted about Tulip.Money and their future plans. Tulip was launched mid-January and instantly met a great success among $ROSE holders. But a lot of people in the Oasis ecosystem don’t know what it is and how does it work exactly. Those are the questions that we’ll try to answer below.

What is Tulip?

Technically speaking, $TULIP is an algorithmic stablecoin pegged to the price of $ROSE via seigniorage. That means, 1 $TULIP ~ 1 $ROSE. We’ll see below why this is important.

Initially, Tulip.Money was a tomb fork, but within the last couple of weeks it became way more than that. Currently Tulip.Money offers a vast range of products such as:

Swap
Liquidity pools
Farming
Autocompounders
Zapping
...

Mid-January, Tulip was KYC’d by Assure DeFi and they are currently working on to get audited. This is a very good point for any DeFi project and help users to trust the project.

How does it work?

We will explain how it works in a very simple way, so you can get the big picture. But you should read Tulip’s documentation before putting your money in it, we’ll provide with all useful links at the end of the article.

Basically, there are three tokens issued by Tulip.Money, each one with a specific role.

TULIP token is designed to be used as a medium of exchange and is pegged to ROSE.
1 $TULIP~1 $ROSE.

PETAL are one of the ways to measure the value of the Tulip Protocol and shareholder trust in its ability to maintain TULIP close to peg.

BUD main job is to help incentivize changes in TULIP supply during an epoch contraction period.

🌷 TULIP: You can earn PETAL by providing TULIP/ROSE LP in the farm.
🌸 PETAL: You can stake your PETAL to earn TULIP. The rewards are distributed only when the average price of TULIP (TWAP) is above 1.01 $ROSE.
🌻 BUD: When the TWAP is below 1, you can swap your TULIP with BUD. It will allows to keep TULIP pegged.

Knowing this, we have two possible scenarios.

🔼 TULIP is over peg:

Buy $TULIP by swapping them with $ROSE.
Pair the $TULIP with $ROSE and get your TULIP-ROSE LP.
Stake your LP in the farms to earn $PETAL rewards.
Take your $PETAL rewards and stake them in the garden to earn $TULIP.
Take your $TULIP rewards, sell half of them for $ROSE, pair the rest with $TULIP and repeat step 1.

🔽 TULIP is under peg:

Buy $TULIP by swapping them with $ROSE.
Exchange your $TULIP for $BUD.
If you have LP in the farm, you can break it and exchange the $TULIP for $BUD.
By doing this, you help $TULIP to go back above the peg.
Once $TULIP is back over peg, sell your $BUD for a redemption bonus to get $TULIP.
Follow the steps of the first scenario.

The important thing here is to always keep TULIP pegged to ROSE and if it goes below the peg, help him to go back over the peg. The “Garden”, which gives $TULIP rewards, provides rewards only if the $TULIP is above the peg.

Learn more about Tulip

As we mentioned, we gave you a very simple and easy-to-understand explanation on how Tulip.Money works. Now, you’re ready to get into it and learn more on this. The team behind Tulip seems to be very active and productive, we shall see new stuff coming very soon.