London, United Kingdom, September 7th, 2023, Chainwire
Bumper, a decentralized finance (DeFi) protocol, launched its crypto options killer. The equation that underpins the protocol promises jaw-dropping improvements over traditional Black-Scholes option desks, undercutting the market leader Deribit by an average of 30% and set to disrupt a $13 trillion market.
Bumper's innovation is the culmination of a three-year research and development program, backed by $20m in early funding and collaboration with the Swiss Center for Cryptoeconomics, known for work on Synthetix and coded by renowned developers Digital Mob, who previously worked on protocols such as Barnbridge, Gnosis, and Filecoin.
The result is a protocol that undercuts traditional options desks by one-third while paying between 3-18% APR to Liquidity Providers (LPs) that supply USDC to the protocol. Early adopters of the protocol will also share in $250,000 worth of incentives by protecting their ETH or earning on their USDC.
Bumper’s Co-founder and CEO, Jonathan DeCarteret, says “Bumper removes the downside volatility of a user’s crypto tokens, paving the way for them to take leveraged positions with zero-liquidation risk. That in itself is a major breakthrough, but when you consider it’s on average 30% cheaper than the market leader, the value proposition becomes crystal clear.”
The protocol charges a premium, calculated incrementally during the term, based on market conditions, protocol rebalancing, and proximity to the user's floor. This generates real yields for liquidity providers who realize average returns ranging between 3-18% APR without selling option contracts.
Until now, the methodology for calculating the price for hedging risk relied on the fifty-year-old Black-Scholes model, which has fuelled the $13 trillion options market.
“Fifty years is a long time in tech and although Bumper uses completely different inputs and a novel rebalancing mechanism, it is surprisingly correlated with Black-Scholes, but more efficient, even under the most volatile of market conditions.” said Mr DeCarteret.
Bumper has been deployed to the Ethereum mainnet. It accepts deposits in ETH and USDC, with additional ERC-20 tokens and multi-chain support slated to be added to the protocol in rapid succession.
For more information on Bumper, including their early user rewards and incentives for rival DeFi options protocol users, visit bumper.fi.
Bumper is a DeFi risk market that protects crypto assets from downside volatility. Users buying protection set a price at which they wish to save their crypto should the price fall, but they don't lose out if the market heads upwards. Conversely, other users earn a yield by providing stablecoin liquidity to the protocol.