Bumper

We’re delighted to announce the release of our <a href="https://www.bumper.fi/resources/simulation-report" rel="noopener noreferrer nofollow">protocol simulation report</a>, a comprehensive evaluation of how Bumper performs against real crypto price action.This report is the culmination of over 2 years of research and development, and demonstrates that <a href="https://bumper.fi/" rel="noopener noreferrer nofollow">Bumper</a> delivers price-efficient protection from downside volatility, as well as improving average yields compared to existing options desks - whilst remaining fully solvent at all times.To test the protocol’s effectiveness, an agent-based simulation was developed to replicate Bumper&#39;s protocol design with very high fidelity and test the protocol&#39;s mechanisms and user behaviour in response to external inputs.The goal, ultimately, was to determine whether Bumper could operate in a dynamic environment while still meeting its economic objectives, referred to as the ‘trilemma’, which are to:<ul><li>minimise Taker premia,</li><li>maximise Maker yield,</li><li>ensure constant protocol solvency.</li></ul><h2 id="header-0">Simulation Methodology</h2>The simulation provides an understanding of the dynamic environment in which Bumper must reliably operate, informs the protocol’s mechanisms&#39; effectiveness, and assists in prototyping new functionality. It also plays a crucial role in determining an appropriate set of parameters used to fine-tune the protocol’s mechanisms.Employing thousands of digital ‘agents’ using an Agent Based Modelling (ABM) approach, the simulation was designed to observe the performance of the protocol over numerous different price paths and parameter combinations.Backtesting was conducted using genuine price data, including throughout 2022 during which we saw some of the biggest ‘Black Swan’ events in crypto history (the collapse of FTX and Terra-Luna), as well as unprecedented Federal Reserve tightening and rate hikes, all factors which exacerbated the bear market.<h2 id="header-1">Key Findings</h2>The report highlights a number of key findings which all point to Bumper as a viable and efficient DeFi risk-management solution in virtually all economic scenarios.For the TL;DR, the key findings from the report are that Bumper:<ul><li>provides reliable protection with competitive premia,</li><li>delivers attractive yields independent of any token incentivisation schemes,</li><li>remains fully solvent throughout all scenarios,</li><li>has a surprising correlation with Black-Scholes, despite using different inputs and methodology for calculating premia.</li></ul>As a result, we finally have the detailed proof which allows us to confidently assert that Bumper emerges as a superior risk market compared to traditional crypto options desks.<h2 id="header-2">Download Bumper’s Simulation Report</h2>Ready to deep-dive into the next revolution of DeFi?‍<a href="https://www.bumper.fi/resources/simulation-report" rel="noopener noreferrer nofollow">Download the Simulation Report now</a>.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/82d95e97c58541dba39b167d885a6c65.jpg" />Disclaimer:Any information provided on this website/publication is for general information purposes only, and does not constitute investment advice, financial advice, trading advice, recommendations, or any form of solicitation. &#xfeff;No reliance can be placed on any information, content, or material stated on this website/publication. Accordingly, you must verify all information independently before utilising the Bumper protocol, and all decisions based on any information are your sole responsibility, and we shall have no liability for such decisions.&#xfeff; &#xfeff;Conduct your own due diligence and consult your financial advisor before making any investment decisions. Visit our website for full <a href="https://www.bumper.fi/terms-and-conditions" rel="noopener noreferrer nofollow">terms and conditions</a>.

Move over crypto options - Bumper simulation shows protocol delivers price efficiency and enhanced yields, even in bear markets.

Table of Contents

Bumper

Other articles published on Jun 2, 2023

Japan’s ANA builds an NFT marketplace and envisions metaverse possibilities

SF TechWeek Web3 Trends & Insights: Investment Panel with ALTA - Blockchain Laboratory

Our 100x Crypto Strategy I Top 3 Altcoins To Explode

Licensed Asset Manager in Hong Kong Applies for Bitcoin ETF!

Wemade integrates Fireblocks, the industry-leading digital assets technology provider

Crypto Fundraising Market Continues To Decrease Amid Bear Market

Join our free newsletter for daily crypto updates!