• Bumper, the DeFi protocol, is set to reshape options pricing by launching a new financial instrument that has outperformed traditional options desks.
• The simulation report was generated after two years of research and development, with $20m investment and collaboration with CADLabs and Swiss Centre for Cryptoeconomics.
• The findings of the report are remarkable as they show a correlation with Nobel Prize-winning Black-Scholes model and present an appealing prospect for institutions, fund managers and retail investors.
Bumper Set to Reshape Options Pricing
DeFi platform Bumper today revealed their comprehensive simulation report which showcases new pricing efficiencies over traditional options desks ahead of their protocol launch in August 2023. This milestone in financial technology demonstrates an altogether new financial instrument that consistently outperforms existing options desks in generating both competitive premia and sustainable yields, backtested against genuine historical cryptocurrency market data and options prices.
Research & Development
The results of the simulation report were derived from a two-year Research & Development exercise powered by a $20m investment in collaboration with CADLabs and the Swiss Centre for Cryptoeconomics. The findings mark a seismic shift in the digital asset landscape, showing average 9.3% cheaper premia than buyers of traditional put options; 46.2% yield improvement during bear market conditions without token incentives; and protocol remaining solvent throughout simulated conditions with remarkable correlation with Nobel Prize-winning Black Scholes model.
Bumper’s dynamic pricing is based on forward volatility rather than implied volatility which promises greater returns for investors compared to traditional options pricing models. This positions Bumper as an attractive prospect for institutions, fund managers, as well as retail crypto investors who seek higher yields while taking lower risks through diversified portfolios that feature crypto assets such as Bitcoin, Ethereum etc..
On unveiling this report Jonathan DeCarteret (CEO) expressed his belief that Bumper has the potential to revolutionize not only the crypto options market but also penetrate into traditional finance markets where derivatives are worth $13T annually.
The economic simulation report released today marks a significant validation of Bumper’s innovative approach to date and could potentially be one of the most substantial challenges yet to Black Scholes derived pricing methodology.