What is Bumper.fi

Bumper is a decentralized volatility protection protocol built on the Ethereum blockchain. It’s designed to provide an easy-to-access way to minimize downside volatility, while still retaining all the upside potential of cryptocurrencies.
Under the alias “God mode” for crypto, Bumper uses a combination of user-backed liquidity pools and several redundancy mechanisms to allow users to lock in the minimum value of their assets (known as the price floor) in exchange for paying a nominal premium. If the market value of their assets falls below this price floor, protection will kick in and they’ll be completely protected against any further losses.

The size of the premium paid for this service is closely related to the level of coverage taken, with a higher price floor (greater coverage) costing more than a lower price floor (less coverage). On the other side of the Bumper protocol are the liquidity providers, who contribute the stablecoin used to cover bumpered users in return for a proportional share of the premiums.

Users will need to hold the platform’s native utility token, known as “BUMP,” in order to take out protection or provide liquidity. The token can also be used for staking, receiving protection premiums and participating in the governance of the Bumper protocol.
The platform is a joint collaboration between the team at Bumper and blockchain development house Block8. The team is formed of experienced developers and early crypto adopters, including CEO Jonathan DeCarteret, an established entrepreneur with fintech experience and a history of leading new-age financial platforms.
Other team members include Bumper CTO Samuel Brooks, an expert in distributed ledger technologies and a thought leader in the blockchain space. Samuel previously worked as Blockchain Lead at Havven (independently pivoted into Synthetix) — one of the first Block8 developments.

How Does Bumper Work?
From a practical perspective, Bumper is a decentralized application (DApp) accessed over the Ethereum blockchain. To take out protection or provide liquidity to the protocol, users need to interact with the DApp using a compatible Web3 wallet (such as MetaMask).

The cost of the premium varies depending on a number of factors related to the amount of risk in the system. But in general, users can expect the premium to decrease as their protected asset increases in value, whereas the premium will increase as the asset moves closer to their selected price floor. The majority of this premium is distributed among those that provide liquidity to the protocol, while 0.5% is kept back as a platform fee.

Under the hood, Bumper uses a “near-zero slippage engine” to ensure protected users can always retrieve their assets either in their stablecoin equivalent value (if it falls below its price floor) or in their original form if protection isn’t needed.

The Bumper protocol always seeks to maintain a suitable reserve-to-assets ratio (RAR) to ensure that all liabilities are covered by the reserve and includes first and second-order risk-dampening capabilities — ensuring the reserve can be rebalanced through arbitrage bots and other means should the RAR ever fall too low.

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