• Bumper, a DeFi platform, released the findings of their comprehensive simulation to exhibit new pricing efficiencies over traditional options desks.
• The report shows that Bumper Takers paid 9.3% cheaper premia than buyers of traditional put options and during the 2022 bear market, Bumper’s simulation showed a yield improvement of 46.2%.
• The protocol remained solvent throughout the simulated conditions and its results have remarkable correlation with the Nobel Prize-winning Black-Scholes model.
DeFi platform Bumper today unveiled the findings of their comprehensive simulation, exhibiting new pricing efficiencies over traditional options desks ahead of the protocol launch in August 2023.
The report delineates a milestone in financial technology, showcasing an altogether new financial instrument that consistently outperforms existing options desks in generating both competitive premia and sustainable yields. On average, Bumper Takers paid 9.3% cheaper premia than buyers of traditional put options while during the 2022 bear market, Bumper’s simulation showed a yield improvement of 46.2% for Makers compared to options pricing without resorting to token incentives. The protocol remained solvent throughout the simulated conditions and its results have remarkable correlation with Nobel Prize-winning Black-Scholes model.
On release of this report, Bumper CEO Jonathan DeCarteret expressed his views on how it has potential to penetrate traditional finance and disrupt colossal $13T derivatives market in future as well as revolutionise not just crypto options market but also traditional finance sector.
Investment & Collaboration
This research was powered by a $20m investment and derived in collaboration with CADLabs and Swiss Centre for Cryptoeconomics which marks an important validation for Bumper’s innovative approach till date.
The economic simulation report released today marks one of the most significant challenges to Black-Scholes derived pricing in half a century which positions Bumper as an immensely appealing prospect for institutions and fund managers along with retail crypto investors.