Bumper Launches Crypto Options Disruptor
Bumper, a decentralized finance (DeFi) protocol, has unveiled its groundbreaking crypto options solution. This protocol offers significant advantages over traditional Black-Scholes option desks, outperforming the market leader Deribit by an average of 30%. With the potential to disrupt a $13 trillion market, Bumper’s equation promises impressive improvements.
Achievement through Research and Collaboration
Bumper’s innovation is the result of a three-year research and development program, supported by $20 million in early funding. The protocol was developed in collaboration with the Swiss Center for Cryptoeconomics and coded by renowned developers Digital Mob. These developers have a proven track record in projects such as Barnbridge, Gnosis, and Filecoin.
Cost Efficiency and Incentives
Bumper’s protocol undercuts traditional options desks by one-third while offering liquidity providers (LPs) APR between 3-18% for supplying USDC. Early adopters of the protocol can also benefit from $250,000 worth of incentives, either by protecting their ETH or earning on their USDC.
Zero-Liquidation Risk and Lower Costs
Bumper’s Co-founder and CEO, Jonathan DeCarteret, highlights that the protocol eliminates downside volatility and allows leveraged positions with zero-liquidation risk. Furthermore, it offers users an average cost advantage of 30% compared to the market leader.
Real Yields for Liquidity Providers
The protocol charges a premium based on market conditions, rebalancing, and proximity to the user’s floor. This generates real yields ranging between 3-18% APR for liquidity providers, without the need to sell option contracts.
Revolutionizing the Options Market
Bumper’s innovation challenges the fifty-year-old Black-Scholes model that has fueled the $13 trillion options market. Despite using different inputs and a novel rebalancing mechanism, Bumper is surprisingly correlated with Black-Scholes, but more efficient even in volatile market conditions.
Expansion and Support
Bumper has been deployed to the Ethereum mainnet and currently accepts deposits in ETH and USDC. The protocol plans to rapidly add support for additional ERC-20 tokens and multi-chain functionality.
Hot Take
Bumper’s launch of its crypto options solution marks a significant milestone in the DeFi space. By offering lower costs, zero-liquidation risk, and real yields for liquidity providers, Bumper has the potential to revolutionize the options market. Its collaboration with industry leaders and innovative approach positions it as a disruptor in the $13 trillion market. As more users adopt the protocol and additional features are added, Bumper’s impact is likely to grow.
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