BlockTalks x 2nd Bumper AMA Transcript!
We recently hosted an AMA with Bumper, on December 11th at 10 AM UTC. Many of you might have participated or many of not. But we make sure no one missed out from the knowledge shared by Jason Suitte, CMO at Bumper So here we are up with the AMA transcript, for those who missed the live session, this blog post will be a saver & feeder of knowledge for them.
Introduction Questions Asked By Team BlockTalks!
Q1. Could you please introduce Bumper to our community in layman’s term?
Ans — The Bumper protocol works by creating a liquidity pool interchange. By incentivising LPs (Makers) to the Reserve which provides the ability for policyholders (Takers) to protect their asset. They pay a premium which is part of the incentive for the Makers.
Think of it as a ledger that monitors both sides of the pools and uses a bunch of ratios to maintain its balance. When that balance is disturbed, the protocol kicks in numerous actions like incentivised mechanisms to rebalance. It essentially breaks up the risk and redistributes it. The Makers are highly incentivised buyers of risk and the premiums act as that first layer mechanism to manage the agents in the protocol.
Q2. What are the advantages of Bumper to the other alternatives in the Blockchain field?
Ans — There isn’t anything out there like Bumper. There are options platforms and options aggregators but that’s just taking a TradFi solution that was invented in the 70s and translating it into DeFi. We actually utilize the pooling mechanisms that DeFi offers to lower the cost to entry and protect a user’s asset value with a more user-friendly approach. Recently we’ve conducted an Agent-based Model and now have figures that show we are 70% cheaper than options.
We’re actually very excited with these results because they come from not even a fully optimised protocol. Straight out of the gate.
Q3. What are the major milestones Bumper achieved so far & what are in the future pipeline?
Ans — We opened an institutional investment round earlier in the year and raised over $10m in funding at that time. Part of our ethos is to ensure we’re engaging and valuing early project supporters so we declined an additional $32m in funding at the time to allow the community to get in on the project early on.
Our Liquidity Provision Program attracted over $25m, so there’s a lot of support out there for Bumper.
We’ve since run a Pre-sale and currently in a Public Sale which again help future users get access to the token.
As for the future, our roadmap gives an overview of what’s coming up:
Lots on the horizon including releasing onto Layer 2, partnerships and integrations, a range of use cases!
But the biggest milestone to look out for is when protection goes live in Q1 2022.
Here’s an early prototype
Questions Asked on Twitter For Bumper Team!
Q1. I read that Bumper adjusts its protocol to Agent Based Modeling (ABM). So can you tell us what is this modeling? How will it work based on your protocol? What results can we expect for takers and makers? What is the probability of an unsustainable price movement?
Ans — A few questions to unpack there so I’ll try to keep it short. The best is to read this article about the ABM and it’ll explain what it is and how it works, plus some results from our initial modelling.
https://medium.com/bumper-finance/bumper-protocol-modelling-update-88003a190f7b
The second question about results, as mentioned above, unoptimised it’s showing as 70% cheaper. More info on results in that article as well.
Finally, probability is extremely low and essentially we can build the protocol to whatever the market desires. If users want total coverage under all circumstances then it becomes a matter of cost. Still cheaper than others though.
Q2. I know that thanks to Bumper users can place a minimum price on an asset so that it does not go down and keeps its value, but isn’t this the same or similar to the limit orders we are used to place? What are the differences between a limit order and the Bumper service?
Ans — A limit order instructs the broker/exchange to trade a certain number of shares at a specific price or better. This effectively closes your position.
The way Bumper works is fundamentally different as positions are managed through pools. It’s only at the point where you redeem your policy that your position is taken, depending on where your asset is in relation to your price floor. The asset can oscillate along your floor and you don’t need to care.
A limit order/stop loss will trade you out at a strike price but then you’re out for good. Bumper doesn’t work that way. We use the pool aggregate to maintain positions and incentivised mechanisms to keep it working.
In practice the biggest difference is that Bumper will allow you to ride any pumps. Even immediately after it has dumped.
Q3. Bumper raised more than $16M in different round, how Bumper is going to utilise those funds? How efficiently the management is going to make maximum of peoples money?
Ans — Development is very difficult and hugely expensive. We now have a runway to do more than we hoped for and keep building for some time. Our job is to maximise output and help transition to the DAO in time.
Q4. The goal of Bumper’s Staking module is to provide BUMP holders with a means to support the protocol without participating as a Maker or Taker in v1.0, but how will this module help bettors achieve variable returns? Also, how can we block part of the BUMP in the module?
Ans — Jason Suttie, [11-Dec-2021 at 4:21:08 PM]:
The Staking module is designed as a safety module, a kind of backstop to absorb risk as well. It’s there to support the Makers who essentially buy the risk.
Just this week we announced more details on staking. You can read about that in detail here:
Q5. Your flashpaper says Bumper gets 0.5% & 0.25% from protection premium & stable coin reserve, and aggregately makes $3.75M if TVL reached $1B, so who decided how $3.75M used, management or DAO will be in place?
Ans — As Gareth mentioned above, moving toward a DAO is on the roadmap. Future decisions on the protocol like this will be made by the community. If you want to help shape the future and have a say, you can get tokens in the currently live Public Sale.
We’re in conversations with a couple of partners at the moment to help us implement the DAO which is super exciting.
Questions Asked by our BlockTalks Community Members during live Session to Bumper Team!!
Q1. Contract security is a big deal in Crypto space. Has your project been audited yet? What solution for security do you have right now?
Ans — I’m going to kick off with this one. Security is something that is always of concern due to the nature of this industry. It’s still so nascent and this leaves it open to being exploited. So far our smart contracts have undergone two independent security audits, with another in the process at the moment. Links to both of these are on our site: https://www.bumper.fi/bumper
We’ve also just partnered with InsurAce who provide protection for DeFi protocols.
https://medium.com/bumper-finance/bumper-x-insurace-partnership-announcement-f7ff35223b19
So we’re making sure we’re well covered.
Q2. Are you planning to promote your project in countries / regions where English is not good? Do you have a local community for them to better understand your project?
Ans — Following on from my comment earlier about community involvement. We’re keen to make sure Bumper is as accessible to as many people as possible. We’ve recently launched some Bumper channels in different language and will be working toward providing collateral in those languages going forward. We’re also always looking for Ambassadors who can help us with this.
Q3. Is Bumper Protocol created for professional used only? Does it suitable for beginners too where they put small investment on crypto?
Ans — This question is a favourite of mine because I see Bumper as a bridge for retail, even non-crypto, investors to dip their toe in without being exposed to the risks normally associated with Crypto.
We really want to build a protocol that has wide appeal from it’s simplicity, cost and effectiveness.
The way Bumper works means it can be used all the way from those retail crypto investors to professional traders, institutions other DeFi protocols.
Check out the Use-Cases in our one-pager
Q4. Where can I buy token? Will it be less expensive or more expensive? Possible all links to all your social media platforms if possible?
Ans — We currently have a token sale running on the Tokensoft platform.
This is the best way to get hold of the token:
Q5. Partnership is like a supplement. Can you name some of your recent partnerships that can help your project? Is there any partnership that will take place in the near future?
Ans — We believe this too. We are part of a broader eco-system with some super smart people building some super clever protocols.
Just in the last week we’ve announced partnerships with:
Visor — https://medium.com/bumper-finance/bumper-collaboration-with-visor-finance-d5917c343776
milestoneBased — https://medium.com/bumper-finance/bumper-and-milestonebased-partner-to-facilitate-shift-to-dao-cc7bfcd6221c
InsurAce — https://medium.com/bumper-finance/bumper-x-insurace-partnership-announcement-f7ff35223b19
And there are more in the pipeline. Each of these parternships we’ve had conversations with to understand the value on both sides. So we’re truly working together to bring more value to DeFi
