Bumper is on course to be one of the breakout decentralized finance (DeFi) protocols of the future, with the project rejecting more than $30 million of investment offers in a heavily oversubscribed institutional and venture capital sale in March this year.
This makes the pre-sale of its native BUMP token, which went live on Oct. 14, 2021, all the more alluring. The current pre-sale allows savvy investors to get their hands on this groundbreaking token at discounted prices ahead of the public sale and initial DEX offering later this year.
Come bear or bull market, the Bumper DeFi price protection protocol safeguards crypto assets where stop-orders and call/put options fall short. Based on this unique offering, Bumper looks set to be a top-three protocol within the DeFi ecosystem, and more importantly, if a user wants to reap the benefits of the price protection platform, then the BUMP token is mandatory. You will need BUMP in order to use Bumper.
How does Bumper differ from other price protection tools?
The crypto investment space is a pin-up for market volatility, but what if you can keep skin in the game when the markets are up and protect your crypto assets when they’re down? The Bumper protocol does just this: protecting your crypto investments against these dips in the market while ensuring you maintain full upside exposure.
A traditional protection mechanism like a stop-loss tool automatically exits investments when the market drops below a predetermined price. This might protect investments from downturns, but it leaves investors out at sea when the market recuperates losses and rallies beyond the pre-slump prices. We’ve all been there, and there’s nothing quite as demoralizing as seeing an asset pump after you’ve dumped.
To attempt a strategy of swapping in and out, a user would be crucified by automated market maker fees and gas costs. Bumper’s intellectual property is its near-zero slippage engine and the formulas surrounding the balancing mechanisms used to provide that elusive price protection. We’ve seen them. We’ve had a preview of their white paper. It’s a lot of math.
The protocol solves these issues by allowing investors to set a “floor” price: a protected level at which they can trade their assets for a stablecoin should they wish to redeem. The important bit to note here is the protocol doesn’t close the investor’s position, which means the user is still exposed to the upside. There really isn’t anything else out there like Bumper.
The protocol aims to protect other DeFi protocols as well as both institutional and retail investors. For the latter, one particularly pertinent use case for the Bumper protocol is that it will enable corporations that add crypto to their balance sheet (which also have a fiduciary duty to their shareholders to protect assets) to hedge against volatility risk. This even includes nation-states that want to directly invest in crypto, which is good news for all of our readers in El Salvador.
For everyday investors, the platform has been designed with an easy-to-use interface, making it accessible to anyone wanting to invest in crypto and protect their investments from inherent market volatility. The crypto industry has been waiting for a solution to the Holy Grail issue of volatility ever since its inception, so the arrival of Bumper onto the scene certainly seems to be a major breakthrough for the crypto market.
The BUMP token
Apart from its price protection protocol, holding the token allows the holder to play a role in the future of Bumper as it moves toward a decentralized autonomous organization, giving holders voting rights and a role in the governance of the protocol. The BUMP token is required to utilize the protocol’s price protection mechanism, receive Maker rewards, and also to stake into the protocol. BUMP tokens are used in a system of “bonding” when a policyholder uses the platform, so having a wad of them in your wallet now might mean you can protect more later.
Anyone who is interested in the benefits of owning BUMP can purchase it during the pre-sale and earn the title of being an early BUMP holder, adopter and supporter. By purchasing now, many users can expect to avoid paying a premium for BUMP later this year.
There is also a loyalty program that will be launching in the near future, but right now, there is an exclusive community on Telegram, the Sky Lounge, that requires participants to hold a specific amount of BUMP to join.
How does Bumper work?
Investors seeking protection are diametrically connected to liquidity providers. The protocol comprises four liquidity pools. The unstable assets of the protection “Takers” in one pool, stablecoin assets in another pool provided by liquidity providers, or “Makers,” and two more secondary pools that power the internal mechanisms.
Leveraging their revolutionary near-zero slippage engine, the Bumper protocol uses a chain of ratio balancing equations among all four pools to allow the protection for the Taker’s unstable asset while providing flexibility to exit their position, up or down.
In the event of dramatic and sudden price drops, the protocol has a number of redundancy measures built into it, such as rebalancing the liquidity pool ratios through arbitrage bots or on decentralized exchanges, which ensure that Takers or Makers are able to redeem assets at any given time. A separate risk pool lies in wait to back any realized losses. It’s these cascading tranches of risk dissipation measures that ensure Bumper is able to offer bullet-proof price protection on crypto — a true innovation if ever there was one.
Bumper also alters premiums and yields to maintain equilibrium among the pools through a dynamic fee structure, which is linked to the asset’s price from the protected floor and the state of the protocol. This means investors are not only exposed to the upside when the markets go up but their fees are reduced during these periods. Investors are also free to move in and out of protection at will, exiting the service at any time for the amount of USD Coin (USDC) they set.
The pre-sale
If the private sale is anything to go by, the BUMP token is looking like a sure bet as one of the standout tokens to buy for individual traders and institutional investors. Bumper’s liquidity provision program was closed early by the team after it attracted over $25 million, currently placing Bumper as the eighth-biggest DeFi derivative protocol. The protocol is wholly unique in the way it addresses one of the key hurdles in the crypto space. If we can get past volatility, then this crypto investment is an increasingly obvious choice.
Bumper’s Pre-Sale went live at 12 pm UTC on Oct. 14 via the Bumper decentralized application and is set to run until Oct. 21 at 12 pm UTC. There’s still time to get involved in one of the most exciting events of the 2021 bull run, but be quick. The tokens up for grabs are limited and selling out fast.
Pre-sale: https://bumper.fi/pre-sale
To stay up to date with Bumper and all the exciting developments the project has planned, tune in to its social channels below:
Telegram: https://t.me/bumperfinance
Discord: https://discord.gg/YyzRws4Ujd
Twitter: https://twitter.com/bumperfinance