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Home Guides What is Bumper Protocol? (BUMP)

What is Bumper Protocol? (BUMP)

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Bumper is a DeFi price protection protocol that runs on the Ethereum blockchain.

Blockchain ventures are undoubtedly one of the hottest and most profitable ventures today, but as with any investments, higher rewards also come with higher risks. One platform capitalized on this massive dilemma by offering insurance on blockchain investors’ assets, providing covering on their funds in the event of unfavorable market conditions, giving them peace of mind that their assets would be fine. 

Background 

Bumper’s CEO, Jonathan DeCarteret, and his team have worked hard to develop an efficient platform that could provide complete protection on user funds. 

The Bumper team knows that profitability shouldn’t be the only capability of a blockchain platform but also holistic protection for their users’ hard-earned funds. 

What is Bumper? 

Bumper is a decentralized finance (DeFi) price protection protocol that uses the Ethereum blockchain platform and protects the price of crypto assets by providing highly secure and decentralized software. 

Platform users who provide USDC liquidity receive rewards for their actions. These rewards come from the fees paid by other users who pay for digital asset protection. Users who take asset protection, as well those that create liquidity, are the two vital parts of Bumper that enable it to grow even further. The ‘takers’ and the ‘makers’ benefit from each other, and both benefit the entire platform. 

With Bumper’s further growth, it will have the capacity to protect larger and even more diverse asset pools, which will result in bigger yields, and would provide bigger benefits for users. 

How To Start Protecting Assets With Bumper 

  1. Users need to choose an asset they prefer to protect, select the desired amount, and choose the protection floor. The protection floor is the minimum value that an asset can fall before Bumper prevents any further loss. 
  1. Users will then have to confirm Bumper’s policy, including staking BUMP tokens and locking up their assets. They will be credited 1:1 with a fully-liquid bumpered version of their assets, and users are now officially protected by the Bumper platform. 
  1. Bumpered tokens can be put on various transactions such as selling, trading, staking in yield farms, providing liquidity, and even as collateral. 
  1. Finally, users can redeem their policy above or below the price floor by sending back their bumpered tokens and paying the policy fee. Users will also receive the BUMP they staked back, including the bonus that they’ve accumulated. 

BUMP Token 

Investors are required to purchase BUMP tokens first in order to gain access to Bumper’s asset protection and tap the benefits of being a liquidity provider. And since Bumper will soon shift into a decentralized autonomous organization or DAO, BUMP holders will be given the privilege to have voting rights and a role in the governance of the platform.

Investors can also have the opportunity to buy BUMP at a more affordable price at Bumper’s Pre-Sale event, which allows them to protect their assets at a lower cost. Those who missed the platform’s pre-sale can still gain new opportunities on Bumper’s upcoming loyalty scheme and new and exclusive Telegram community. 

Crypto Invulnerability and Crypto Power-Up 

Bumper’s Crypto Invulnerability provides users the capability to protect their cryptos even during market crashes and prevent the prices of their cryptos from going below the price they’ve set. If there is an uptrend in the market, Bumper also helps users’ assets rise as well. 

In Crypto Power-Up, users who would deposit their assets will have an opportunity to profit from being a DeFi Liquidity Provider (LP). Platform users who would become Bumper LP can earn a yield from the premiums paid by users who have applied for asset protection. 

4 Options That Users Can Do With Their Assets 

Redeeming Above The Price Floor 

Every Bumper user must aim to redeem their assets above the price floor to allow them to have a real profit as they will gain a higher price than the fixed minimum amount on their protection policy. 

Redeeming Below the Price Floor 

Users can minimize their losses if they choose to redeem their assets below the price floor because Bumper’s major feature is to protect users when their assets’ value slides down below a pre-configured threshold. 

Leaving Assets Protected 

Bumper recognizes that unexpected circumstances may happen to anyone, including its users, which is why it provides users a fast and easy way to enter and exit into the protection policy. Moreover, users only have to pay for the time they were covered with protection and don’t have to burden themselves with expensive and lengthy lock-in periods. 

If users wish to enter or exit on a plan, Bumper doesn’t implement any charges, giving them the freedom to choose without adding costs. After redeeming their policy, the cost of users’ plans will be prorated and subtracted from their payout. 

If users want to remain in their policy, they are required to pay a daily protection fee, which they check on the platform’s dashboard. 

Redeem and Re-Protect At a Different Price Floor 

Users also can change the price floor of their protection plan. They are allowed to lessen their costs by bringing down the price floor or raise their protection by increasing it. Regardless of what they want, they must redeem their plan and enter a new policy. 

This extreme flexibility allows Bumper users to adjust whenever there are changes in the market. The platform makes it easy for them to tap an opportunity or protect themselves from imminent risks. 

Advantages of Being a Bumper Liquidity Provider 

Liquidity providers are needed in the Bumper platform to counter the effects of users’ decisions to protect their assets, giving the platform the balance it needs. 

Bumper’s pooling system allows LPs to pool as much or as little of their assets as they want, and they also have the option to take out their tokens after a couple of weeks. After they officially leave the pool, Bumper allows them to sell their tokens and interest, giving users another income stream even when they’re not inside a pool. 

And since Bumper is a blockchain platform, all the said transactions are done through smart contracts. In other words, traditional intermediaries are eliminated from the process, providing speed, efficiency, and transparency on transactions. 

Suppose users want to exit the pool, they need to redeem the bumpered tokens from the protocol, and the platform will immediately return their original stake, including their accumulated interest straight to their digital wallet. 

How To Be A Bumper Liquidity Provider? 

To be a Bumper LP, users need to access the platform and connect their wallet, which needs to contain stablecoins. After that, they must go to the ‘Earn’ page, which will show their Bumper-supported tokens in their wallets for deposit. 

Next, users need to select the asset they want to supply, click the ‘deposit’ button, and set the amount. After setting all the necessary parameters, Bumper will show an estimated weekly yield to provide them with clear expectations of what they could earn as the platform’s LP. Finally, click ‘Next’. 

Roadmap 

Conclusion 

More than profitability, what investors desire the most is peace of mind that their funds are always safe from various risks, especially from the massive ones. 

Bumper’s insurance policies and its other features designed to protect user funds against any risks provide a much-needed service for an industry that sits on both profitability and uncertainty. 

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