Bumper Finance — Keep Your Crypto Assets Protected Even In A Bear Market With This Cryptocurrency Gem
Did you lose funds during the last crypto market crash? Are you thinking what you could have, would have and should have done? Well, let me introduce to you, Bumper Finance. Bumper is an innovative DeFi protocol designed for price protection of your crypto assets against downside market risk. Set the price you want to protect, and if the market crashes, your asset will never fall below that price. Importantly, if the market pumps, your asset rises too. This is a prototype of a user experience of someone looking to gain that price protection. You just need to set the percentage of your assets you want to protect and at what price, then let Bumper do the rest. I know what you are thinking… where was this 2 months ago!
Taking Protection
Users protect their assets by attaching a wallet to the BUMPER Web3 dApp. BUMPER charges a nominal floating daily premium, which proportionally drops as the protected asset price increases in value. Users choose the amount and price of ETH to protect (further assets will be added in future releases). In return, the protocol locks the ETH in the BUMPER smart contract and debits back a corresponding amount of Bumpered ETH (bETH). bETH is a fungible token that represents a claim over the underlying asset pool at a secured price point. To end protection, users send their bETH or equivalent value back to the protocol. BUMPER then reconciles and returns the protected amount, minus any premium fees back to the user’s wallet. Users can jump in and out of protection as often as they wish.
Earning a Yield
First, check this out…you can earn 300%+ APY* by becoming an early Bumper supporter from July 14! Farm BUMP by depositing USDC and get exclusive access to buy additional BUMP tokens.
Here’s how it works…The protocol is made up of two diametric asset pools which provide protection against asset risk through a near-zero slippage engine and a number of rebalancing mechanisms. ‘Takers’ of protection (policyholders) operate diametrically to ‘Makers’ of liquidity (Liquidity providers). On the one side is an asset pool consisting of ETH, and on the other side is a reserve pool made up of USDC stablecoin. The diametric asset pools represent either the Taker or the Maker respectively, and when a takers cryptocurrency falls below a certain floor, Bumper’s protocol makes a swap (on redemption), and in this way reduces transaction fees and minimizes slippage.
Liquidity providers use the BUMPER dApp to send USDC to the protocol to receive a yield (further stablecoins will be added in future releases). In return the protocol sends the user a corresponding amount of Bumpered USDC (bUSDC). This is a fungible yield -bearing token, pegged to USDC, but which increases correspondingly over time due to the accrued yield. You can transact and trade this token, as you would any other. Importantly, the stablecoin liquidity pool generates a yield to attract inter-protocol Total Value Locked (TVL). Furthermore, since the pool is covering only ‘virtual’ liabilities, a large percentage can be sent to other protocols (i.e YEARN) to earn a secondary yield, in addition to the premiums paid by protection Takers.
Users who wish to withdraw their USDC can simply redeem their bUSDC from the protocol and BUMPER returns their original supplied USDC plus accrued interest back to the user’s wallet.
Near-Zero Slippage Engine
To add to the outstanding features of Bumper, Bumper also uses a near-zero slippage engine. Once the price of an asset reaches a predetermined floor, Bumper instantly switches a user out of the asset which is crashing and into stablecoin. The term “instantly” is important, as you may have experienced trying to trade an asset during a crash but due to slippage, the price changes before the trade is filled, causing the user to attempt to execute the trade again at a less favorable price. To put it simply, if a market is crashing it can be very difficult, if not impossible, for a trade to get executed at any specific price, as the price will change before the trade gets filled. To solve this problem, Bumper created the worlds’ first “near-zero slippage engine”; this groundbreaking mechanism keeps an internal ledger of all the prices at which takers of protection set their floors, as well as all the positions instigated by makers that supply stablecoin. The engine then pairs them together, and the internal ledger ensures that the price a policyholder sets as their floor is the price they get swapped into stablecoin for — without exception.
The BUMP Token
The BUMP token is an integral part of the Bumper ecosystem, and along with the near-zero slippage engine, reserve rebalancing system, and multiple layers of redundancy, BUMP tokens further assist in maintaining the resiliency of the protocol.
The token is woven into every facet of the platform and is the first entry point to the Bumper ecosystem — since both price protection “takers” and liquidity providing “makers” need to deposit BUMP tokens to begin interacting with the protocol.
The key result of requiring BUMP to participate in the Bumper protocol market is that it fundamentally binds the value of the utility of the software with the demand for the token (on external exchange platforms and marketplaces); takers who wish to participate by protecting their assets from price shocks will need to deposit BUMP tokens for the duration of their protection position. Ditto for liquidity providers, who are required to deposit BUMP tokens while contributing to their chosen liquidity pool. This is the utility side of the coin.
On the other side of the coin are BUMP incentives. Both sides of the Bumper protocol micro-economy are incentivized to participate in the form of a gradual BUMP token yield, earned on top of their BUMP deposit. This helps to reward those that interact with the protocol and support early network effects. Bumper has a large reserve of tokens for this purpose, designed to sustain the protocol in the long term. In later releases, BUMP token holders will be able to stake their tokens to help further improve the robustness of the protocol.
As the network grows and matures, the circulating supply of the token will ultimately decrease, which combined with increasing demand, will serve to match the value of BUMP supply with the utility of the ecosystem.
Start preparing yourself for Bumper. First, take advantage of the 300%+ APY beginning on July 14th where all you need to do is stake USDC. The IDO, coming in November, will be of epic proportions. Protect your funds from the next market crash. Use Bumper.
Till the next Medium, you’re on your own. Laterrrrrrr.
