Since the launch of Bitcoin and other cryptocurrencies many people have become billionaires and others have lost billions due to high volatility in the price movement of cryptocurrencies.

In 2017, Bitcoin went to $20k and fell back to $3.3k causing billions lost by panic sellers or even the one holding could have increased their crypto balance if they had sold at the top. Many people make a fortune in crypto trading but most of them ended up losing their profits. That’s where Bumper Finance can help as their protocol not only protects users from any possible downside but also ensures they retain the same incredible upside potential characteristics of cryptocurrencies.

What is Bumper finance?

Bumper is a Decentralized Finance (DeFi) price protection protocol. The protocol is a market for on-chain asset price risk, transferred from a stable coin reserve via redundancy modules. It acts as an insurance policy for the value of crypto assets against the volatility of borrowing techniques. Bumper enables users to protect the value of a crypto asset by establishing a price floor for that asset and guaranteeing that it can be redeemed at that price.

Bumper finance Features

Protecting your capital

This is the main feature of Bumper finance where people deposit their assets into the Bumper protocol and are issued corresponding Bumpered assets in return. They set a price floor and the system automatically protects that price and even helps yield more returns.

Earning Yield

Liquidity providers can use the Bumper finance to earn yield against their assets in stablecoins form. Bumper finance generates a set of ERC-777 tokens, which represents a future claim on the stablecoin Reserves which are yield-bearing tokens that pay interest over time.

Highly efficient slippage control engine

To avoid the slippage between protection takers and makers, Bumper Finance uses a pool-based deferred-transaction approach which collects every position that is initiated by either a maker that supplies stablecoin or a taker that supplies an asset to protect it.

How Bumper finance protects your crypto

As mentioned before, Bumper enables users to protect the value of a crypto asset. It means that if the market falls, the asset will not fall below the price floor you set. And, if the market rises, the asset will rise with it. Of course, a user pays a small premium for this protection, which can be as low as 3% p.a. A user can enter and exit protection as frequently as they want and expand to protect any crypto asset.

Users who invest in the protection can specify the price floor they want to protect before depositing the asset into the Bumper protocol. Bumper then opens a taker position and equips a comparable number of Bumpered assets – fee-bearing tokens representing their protected position. When the balance of function is called, a Taker's Bumpered Asset balance is calculated. However, it is only adjusted with their accumulated premiums when they redeem in one transaction. Protection makers provide liquidity by opening a position in the stable coin Reserve. Bumper creates a collection of fungible ERC-777 tokens, which gain interest over time. They are compensated in stable coins and approved by decentralized governance.

Users safeguard their assets by linking a wallet to the Bumper Web3 dApp. Bumper charges a daily premium, which decreases as the value of the protected asset increases. Users are enabled to select the amount and price of ETH to be protected, and in exchange, the protocol locks the ETH in the Bumper smart contract and debits back a corresponding amount of Bumpered ETH (bETH), which is is a fungible token that symbolizes a claim on the asset pool at a fixed price. Finally, users send their bETH or equivalent value back to the protocol to end protection so Bumper can reconcile and return the protected amount to the user's wallet.

Join us!

The Takeaway

Seeing as such, the user's assets are protected. Bumper is simple, useful and within the reach of everyone. This is a secure investment that only requires a small premium, which can be as low as 3% p.a. So, for a cheap price, a user can be less anxious over the volatility of cryptocurrency and be at ease knowing that Bumper has got them covered. Not only that, if the market falls, the asset will not fall below that price. And, if the market rises, the asset will rise with it.

The future of Bumper Finance is very bright indeed and their market share will also most likely increase considerably. To summarize, Bumper is a great and highly innovative solution to deal with the volatility in the crypto market. Like other unique and innovative solutions that come up these days, the full potential and scope of Bumper will most likely unravel with the passage of time.