LONDON, United Kingdom, July 14, 2021 (GLOBE NEWSWIRE) -- Boom and bust is over. At least, it is for those participating in the new Bumper Finance protocol. The wider crypto market is preparing for a 2nd half of the year that is sure to be rife with volatility. Retail and institutional investors are pouring in. Governments around the world are coming to terms with the new distributed reality and marshalling regulations in response. The swings are only just getting started.
In response to this, the team at Bumper Finance are offering a DeFi price protection protocol that shields its user’s crypto from the devastating price drops seen in April. Created by the founders of INDX, and developed by Block8 (the team behind Havven), VC interest was intense, with $10 million taken by the team from Alphabit, Autonomy, Beachhead, Chainlayer and more. A further $32 million was rejected, with the team choosing to prioritize organic growth and push more of $BUMP’s 250,000,000 max supply into their users hands.
Crypto Asset Protection Rethought
Bumper Finance offers protection policies that mean users can set price floors on their assets by paying a small premium. At 3%, a policy-taker can protect their asset (the first offered on the protocol will be Ethereum) at a 90% price floor. So, if Ethereum falls another 25%, a user can redeem their policy and pocket the 15% difference, minus premiums.
It’s an attractive safety net at a time of unprecedented uncertainty. It’s also very easy to use, requiring only six clicks through a simple and intuitive GUI, so users don’t need to be experts to secure holdings. Best of all, should the asset rise in value – policy holders get to enjoy that rise too, as premiums will become negligible and the asset still belongs to the users.
Incentivising Protection Makers
To fuel this protection, Bumper Finance is launching their liquidity provision program. Live on the 14th July, Bumper Finance is inviting users to earn a slice of the premiums paid by those taking protection on their assets. Providers of the stablecoin reserve of USDC used to protect assets will earn a healthy yield of the protocol’s native $BUMP token.
The yield varies depending on how early in the 12-week lockup period someone joins the liquidity provision – although users are able to join at any time through the Bumper Finance dApp. To incentivise this side of the protocol, Bumper Finance offers 300% APR. This is produced as a combination of direct yields from premiums paid – 100% APR for day 1 LPs.
Bumper Finance is targeting $150 million TVL by the end of the liquidity provision period – a figure that could be far exceeded. Users will be able to purchase up to 20% of their USDC deposit in $BUMP. Savvy crypto investors are sitting on a lot of USDC and other stablecoins at the moment, and Bumper Finance gives those people a chance to put their reserves to work.
There is a raft of failsafe redundancy protocols in place to ensure that all policies are honoured. Initially, a combination of stablecoin and prudential capital reserves, along with the liquidity from the program, will help to initiate the protocol.
If the baseline liquidity falls below accepted tolerance levels, arbitrage bots are allowed in to help balance it. If that's not enough, the protocol rebalances itself on DEXs. Finally, premiums are dynamically scaled and yields adjusted so that at all times the pool has the required liquidity to ensure smooth operation of the protocol. Taken together, volatility is flatlined and everyone’s assets are safe.
No More Bumps on the Road
Bumper Finance is launching its liquidity program on the 14th July. The 300% APR on offer, excellent team, and impressive underlying tech point to a successful launch.
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