How to use Tulip Protocol and Tulip Coin

How to use Tulip Protocol and Tulip Coin

How to use Tulip Protocol and Tulip Coin

As the first decentralized yield aggregation platform built out on the Solana blockchain, we’ve taken a deep dive into the Tulip Protocol platform to figure out what it has to offer and how you can use it.


What is Tulip Protocol?

As a yield aggregator, the Tulip Protocol platform helps users to optimize returns from yield farming by accessing different DeFi protocols and strategies.

The platform has partnered with a number of Solana-based automated market makers (AMMs), including Orca, Atrix, Saber and Raydium.


What is Tulip Coin (TULIP)?

The Tulip coin is a governance token giving token holders the right to vote on matters concerning pool rewards, platform fees, allocation of treasury funds, protocol changes and the overall developmental vision and direction of the project.

The token supply has been capped at 10 million with 20% allocated to the team and 2% to advisors. TULIP coin can also be staked to earn yield from protocol revenue.

Let’s have a look at the various products in the Tulip crypto offering and how you can access them using your Exodus Web3 Wallet.


How to use Tulip’s Swap feature

One straightforward feature that the platform offers is the ability to swap out any Solana-based token for any other token on the Solana blockchain. Here’s precisely how you can do that.

First, download the Exodus Web3 wallet if you haven’t already done so. Then Navigate to the Tulip garden “swap” page.

Click on ‘Connect’ in the top right corner.

From the drop down list, select Exodus. Input your Exodus Web3 Wallet password and login to the wallet.

If you look at the top right hand corner of the page, you can now see that your wallet is connected to the platform. On this page, you can swap any asset on the Solana blockchain to any other asset of your choosing within the ecosystem. Using the tokens available in your wallet, select an asset that you want to purchase or swap into.

Further down the page, click on ‘Swap’. You will then be asked to approve the transaction so go ahead and approve it.

If you check your Exodus Web3 Wallet, you will see the new balance of the digital asset that you’ve bought.


How to use Tulip’s Strategy Vaults

Tulip’s strategy vaults give the user the ability to deposit a digital asset, provide liquidity, and gain access to the underlying strategies of the Tulip crypto platform. With liquidity provision, you should be aware that there is a risk of impermanent loss, where providing liquidity actually earns you less than simply hodling the assets.

With Strategy Vaults there’s no impermanent loss but there is some counterparty risk as it involves locking funds up on other DeFi platforms. No management is required as your funds are exposed to the automated yield farming strategies that Tulip runs in aggregate across multiple lending pools.

To use the Tulip’s strategy vaults, select the contract that you decide upon and input the amount to be deposited. Then click on ‘deposit’.

You will be prompted to approve the transaction and can click on ‘Approve’.

Your funds will now appear as having been deposited within that vault contract, earning the interest rate indicated.


How to use Tulip’s Auto Vaults

Tulip’s Auto Vault is another liquidity provision option that offers an auto-compounding strategy. In this instance, impermanent loss is a risk that you should make yourself aware of.

The depositor benefits from high frequency compounding as Tulip compounds every ten minutes, adding to the depositors balance of token liquidity provided. The high frequency results in higher returns for the depositor.

To deposit into a Tulip Auto Vault, use your Exodus Web3 wallet to connect to the vaults.

In the search box, type in the asset name to find the liquidity pair you want to provide liquidity to.


Check out the various contracts that are displayed. The APY interest rates will vary. Always remember that higher interest rates more than likely mean greater risk.

The steps to deposit funds into one of these Auto Vault contracts are the same as the steps outlined in the section on Strategy Vaults above.


How to use Tulip’s Leveraged Yield Farming

Is high risk with high potential reward something that interests you? Then Tulip has you covered. Tulip Protocol offers a leveraged yield farming option. Leveraged yield farming involves borrowing additional liquidity in order to farm a larger amount of crypto.

Tulip provides you with the ability to access leverage of up to 3x. That means that if you deposit $1,000, you could borrow some additional funds to bring your overall position up to $3,000.

Once you open your Exodus Web3 wallet and access the leverage product, the steps are similar as those described for the other yield-producing products above.

If you choose a trading pair that doesn’t involve a stablecoin, then the risk of impermanent loss is significantly higher. That also means that there’s a greater risk of your position getting liquidated.

Leverage played a large part in the recent crash in crypto markets. That doesn’t necessarily mean that it shouldn’t be used. That said, if you’re not an advanced trader it would be wise to start out with Tulip’s non-leveraged products until you gain sufficient trading skills to even consider trading with leverage.


How to use Tulip’s Lending Pools

We’ve looked at Tulip’s moderate and high risk options. Now let’s consider its low risk product - lending.

To lend into a Tulip lending pool, scroll through the lending pool options relative to the asset you wish to deposit. The process for depositing is similar as described for a Strategic Vault deposit above.

Pay particular attention to the fund utilization rate. The higher the utilization rate, the higher the APY that’s offered to the depositor. That said, be aware that if there is a high utilization rate, you may be unable to withdraw your funds from the pool in that scenario until demand drops.

That’s all for now, we hope that you found this guide on how to use Tulip useful.

This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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