Bumper Finance is an innovative DeFi price protection protocol that allows users to take defensive premiums on their assets and lock in a chosen floor on their value. This means that, should a user’s protected assets fall in value – even drastically – the policies their premiums pay for can be cashed in, and the user can walk away unscathed from a black swan market event.
Why Bumper Is Better than Other Protections
Although a similar effect can be achieved with stop-losses, in that case an asset will be lost. Should the market rapidly recover, as crypto markets are prone to doing, then that asset will be lost. You hear horror stories of people going to bed, a flash crash occurring during sleep and, upon waking, seeing that their positions have been liquidated but the asset price is exactly where it was when they went to sleep. Stop-losses have other issues too, mainly that – as the asset is on an exchange’s order book – it can’t be put to productive use by being stakes or put into a liquidity farm to harvest yield.
Bumper Finance solves these problems. It’s marketed as ‘God-Mode for Crypto’, because it lets crypto traders and holders have their cake and eat it too. Users can enjoy the security of protected assets, keeping the bear at bay, but still enjoy the upward horns of the bull as it rears into life. Built on the Ethereum network (and itself an ERC-20 token), it is a DeFi protocol whose representative tokens can be put to work in the wider DeFi economy. As a price protection protocol, it is both purely on-chain and decentralised. You are not giving your precious crypto to a third party to hold for you on a promise; instead, you are placing it within an audited smart contract that organises the protection for all users.
How Does Bumper Finance Work
Bumper works by users paying a premium on their assets. There will be various price floor protections available, and the initial asset launched with the protocol is ETH. When protection is taken, users receive the representative asset, bETH, which can be husbanded within the wider Ethereum ecosystem.
Should the worst occur and ETH nosedives in value, users can redeem their policy by sending the bETH back to protocol and getting the USDC amount that they chose to look in. To take protection, users must also stake some of the native token of the protocol, $BUMP, which earns a yield. This means that taking protection also acts as a charge to earn a yield in $BUMP, which is paid out into a user’s account when the policy is redeemed.
What Is the $BUMP Token?
The $BUMP token acts as an incentive to help maintain a balance between the two sides of the protocol – the Maker and the Takers. The Takers are those who use Bumper’s primary utility offering, protecting their assets, while the Makers are those who are capitalizing on the protocol in order to earn a yield on their staked USDC.
Makers will receive a yield on their USDC deposits, but will also need $BUMP tokens staked in the protocol to be eligible for that yield. $BUMP is the governance token of the protocol, and in the future, will be used to pay fees within the system. As Takers will need to stake $BUMP in order to get protection, farming $BUMP now will make future protection much cheaper for users.
Maker capitalisation is not the only line of defense against market swings, of course. Bumper Finance has several mechanisms that insulate stored capital in the protocol against even the most violent market shocks, including first and second-order redundancy modules, the opportunity to open out the protocol to DEXs for rebalancing, and prudential capital reserves.
The $BUMP Pre-Sale
Those who mine liquidity in the program will be able to purchase more $BUMP tokens at the Bumper Finance Pre-Sale.
On October 14th at 12 pm UTC, $BUMP will be available to purchase by anyone who registers for the Pre-sale event, which runs for a week, until October 21st, 12 pm UTC. It’s a week that might make all the difference to canny investors who understand $BUMP’s potential to calm the waters of an occasionally stormy market. Yet if all the $BUMP tokens are sold before then, then the Pre-Sale will close earlier. Registration is open now, so interested parties may purchase $BUMP to then use for price protection or trade on the open market.
Bump Up, Not Down
Bumper Finance is the most sophisticated, user-centric DeFi price protection protocol on the market. The excellent UI means even crypto-novices will be able to protect their assets at a few clicks of a button and pay minuscule premiums for maximum protection – all the while earning $BUMP, an asset that will increase the value and more and more people want to unlock God-Mode for themselves. In under a week, Pre-Sale will launch, and crypto volatility shocks will be a thing of the past, at least for those who discover and utilize Bumper Finance.