• Bumper, a DeFi platform, has released the findings of their comprehensive simulation which found that the protocol can generate competitive premia and sustainable yields.
• The report is the culmination of two years of research and development powered by a $20 million investment, backtested against historical cryptocurrency market data.
• The findings have been pivotal in understanding and honing the resilience of Bumper’s protocol across diverse market conditions.
Bumper Set to Reshape Options Pricing
DeFi platform Bumper has unveiled findings from their comprehensive simulation that reveals new pricing efficiencies over traditional options desks. Backtested against genuine multi-year historical cryptocurrency market data and options prices, the report indicates how Bumper’s protocol can generate both competitive premia and sustainable yields ahead of its August 2023 launch.
Key Highlights from Simulation Report
On average, Bumper takers paid 9.3% cheaper premia than buyers of traditional put options during the 2022 bear market. This yielded an impressive 46.2% improvement in yield for makers compared to options pricing without token incentives. The protocol remained solvent throughout simulated conditions despite having different inputs and methodology, showing remarkable correlation with Nobel Prize-winning Black-Scholes model results.
Revolutionizing Crypto Options Market
According to CEO Jonathan DeCarteret, these results challenge accepted norms of options pricing and have the potential to revolutionize not just crypto markets but also penetrate traditional finance to disrupt the colossal $13 trillion derivatives market in future.
Dynamic Pricing Model
The economic simulation report marks a significant validation for Bumper’s innovative approach based on forward volatility rather than implied volatility – making it attractive for institutions and retail investors alike. It signals what could be one of biggest challenges to Black-Scholes derived pricing in half a century.
Through its dynamic pricing model based on forward volatility rather than implied volatility, DeFi platform Bumper strives to reshape existing norms in options pricing with its August 2023 launch – potentially revolutionizing not just crypto markets but also penetrating into traditional finance to disrupt its derivatives landscape worth $13 trillion dollars