By
Chainwire
September 7th, 2023
Following an uncertain time for the crypto markets, the issue of volatility has once again been brought to the fore of mainstream media.
With Bitcoin recently having retraced to below $30,000, and a mass sell-off of major cryptocurrencies, investors new and old have been forced to confront the reality of Bitcoin’s extreme volatility.
As retail investors and institutions react to the recent events, either selling off or buying the dip, some may find themselves tempted by the seemingly stable traditional financial sector. Despite the issue of volatility, the cryptocurrency market has demonstrated its resilience time and time again. By using stablecoins, investors are able to avoid the downwards volatility of crypto, and sit pretty, all the while earning interest on their stablecoins with Bumper — one of the most anticipated DeFi launches of 2021.
While the cryptocurrency space keeps a close eye on the markets, Bumper has been busy building a solution in which investors are able to reap all the rewards of cryptocurrency, whilst minimising risk exposure. In the form of a decentralized price protection protocol that enables liquidity providers to earn considerably more interest than a bank provides.
The problematic issue of volatility has led Bumper to create a solution in the form of a stringent price protection protocol which allows you to protect your investments through an easy-to-use dApp. The protocol effectively converts a volatile asset to a stablecoin while enabling users to reap all the benefits of price surge.
Aside from offering innovative protection for investors, Bumper’s liquidity providers who stake USDC into Bumper’s stablecoin reserve pool will receive a number of benefits. Bumper has not only found a way around the problem of volatility but also makes cryptocurrency work for you.
Getting Paid to Be a Liquidity Provider
Bumper is unique in its approach, but can best be understood as an aggregated ledger that assesses the position in each of the protocol’s liquidity pools and ensures crypto-asset price protection by maintaining an optimal ratio between pools and swapping a protection taker’s asset into stablecoin at the exact price floor they set should their assets dip below this floor and the taker requests a redemption.
Stablecoin liquidity providers, or “makers”, are crucial to Bumper’s protection mechanisms as they are needed to fill the reserve pool and counterbalance “takers” wishing to protect their assets. The most obvious benefit of being an LP is that you will get paid to do so; takers pay a fee to makers in exchange for the price protection they receive from using the protocol. This is a dynamic fee, which decreases as the market rises away from the price floor takers set and increases as the market retraces closer to the floor. Liquidity providers also have the opportunity to receive secondary fees which are generated by the stablecoin pool being farmed out to third party protocols such as Yearn or Compound, thereby compounding their returns.
Rewards for Early Adopters
In July Bumper launched their Liquidity Provision Program to bootstrap the Bumper protocol with net proceeds from token sales going directly to the Stablecoin and Prudential Capital Reserves. It also serves to create awareness of the protocol and distribute tokens into the hands of supporters.
During the Liquidity Provision Program, which runs up until October 14, Liquidity Providers (LPs) are able to deposit USDC and get access to up to $22m+ worth of BUMP tokens. Depositors also have the opportunity to purchase BUMP tokens during Bumper’s Private Sale.
Bumper believes in rewarding early supporters of the protocol, and as such the first LPs who deposited USDC and swapped up to 20% of their deposit to buy BUMP received a token price starting at $0.60. The LP Program is configured so that as deposits increase so does the token price. This provides an incentive to deposit before future depositors. The earlier you choose to deposit and support Bumper, the higher the potential value of your investment. With an APR currently sitting at 399% the opportunity to earn a decent return is very attractive.
USDC which has been deposited will be locked-up until the end of the Bootstrap phase on Oct 14th, at which point LPs can reclaim 100% of their USDC or leave it in and continue earning yield.
From October 7th-14th supporters will be able to swap 100% of USDC deposited at the BUMP Pre-Sale price of $1.80+.
How Does It Work?
The way LPs are able to earn yield on stablecoin is by sending USDC to the protocol via the Bumper dApp to receive a yield. One of the many attractive features of the Bumper liquidity pools is that all yield earned comes with no risk of impermanent loss.
Unlike the traditional finance sector that offers negligible interest rates, Bumper allows you to earn on the liquidity you provide; prior to the launch of protection taking, LPs will earn yield in the form of BUMP token emissions earned by staking into the LP program’s liquidity pool. After protection taking has launched, LPs will earn substantial yields through the premiums paid out by those utilizing Bumper’s innovative protocol to protect the price of their crypto assets. This sophisticated system gives you the choice to invest, earn, and, if you choose to, reinvest.
Visit Bumper to deposit USDC into the Liquidity Provision Program, and start earning outperforming yields today. Stay up-to-date with their news and announcements on Twitter or speak to their team directly on Telegram.
