London, United Kingdom, May 31st, 2023, Chainwire
Marking a major shift in the digital asset landscape, DeFi platform Bumper recently released the findings of their comprehensive simulation, displaying pricing efficiencies over traditional options desks before the protocol’s launch in August 2023. This report unveils a revolutionary financial instrument that beats existing options desks in producing competitive premia and sustainable yields, backtested against real cryptocurrency market data and options prices.
The research and development project, which was supported by a $20m investment and the collaboration with CADLabs and the Swiss Centre for Cryptoeconomics, has taken two years to complete.
Key highlights from the simulation report:
- On average, Bumper Takers paid 9.3% cheaper premia than buyers of traditional put options.
- During the 2022 bear market, Bumper’s simulation demonstrated a yield improvement of 46.2% for Makers compared to options pricing, without using token incentives.
- The protocol remained solvent throughout the simulated conditions.
- Despite having different inputs and methodology, the results of Bumper showed a remarkable correlation with the Nobel Prize-winning Black-Scholes model.
These results have been essential in understanding and refining the resilience of the Bumper protocol across different market conditions. On the report’s release, Bumper CEO Jonathan DeCarteret commented “By challenging and potentially reshaping the accepted norms of options pricing, Bumper stands to revolutionise not only the crypto options market, but also has the potential to penetrate traditional finance and disrupt the colossal $13T derivatives market in the future.”
The report shows the anticipated results of Bumper’s dynamic pricing, based on forward volatility rather than the usual implied volatility. The findings of the simulation report make Bumper an incredibly attractive option for institutions and fund managers, as well as retail crypto investors. This report is the most significant validation of Bumper’s innovative approach to date, and signals what could be one of the most substantial challenges to the Black-Scholes derived pricing in half a century.
Read Bumper’s simulation report here and for more information on the protocol visit https://bumper.fi.
About Bumper
Bumper is a DeFi risk market that provides protection from downside volatility in the price of crypto assets. Users who buy protection (Takers) set a price at which they want to protect their crypto if the price drops, but they don’t miss out if the market goes up. On the other hand, other users (Makers) earn a yield by providing stablecoin liquidity to the protocol.
Learn more about Bumper
Website | Twitter | Discord | Youtube
Contact
CMO, Jason Suttie, Bumper, [email protected]
