2023-6-1 23:27 |
Bumper, a leading DeFi platform, has unveiled the results of its comprehensive simulation, showcasing groundbreaking pricing efficiencies that surpass traditional options desks.
The simulation report, released ahead of the protocol’s upcoming launch in August 2023, marks a significant milestone in financial technology and introduces a new financial instrument that consistently outperforms existing options desks in generating competitive premia and sustainable yields.
The two-year Research and Development effort, supported by a $20 million investment and conducted in collaboration with CADLabs and the Swiss Centre for Cryptoeconomics, has produced extraordinary findings. Bumper’s simulation report represents a seismic shift in the digital asset landscape by presenting a compelling alternative to conventional options pricing methodologies. The report is based on genuine multi-year historical cryptocurrency market data and options prices, lending credibility to the innovative approach.
The release of the simulation report represents a pivotal moment for Bumper, providing strong validation for their innovative approach. This report also serves as a potential catalyst for disrupting the long-standing dominance of Black-Scholes-derived pricing, which has dictated the market for over half a century. Bumper’s potential to reshape the crypto options market and potentially disrupt the derivatives market cannot be underestimated.
Key highlights from the simulation report revealed the distinct advantages offered by Bumper’s protocol. Notably, Bumper Takers paid, on average, 9.3% cheaper premia compared to buyers of traditional put options. Even during the bear market in 2022, the simulation demonstrated a remarkable 46.2% yield improvement for Makers without relying on token incentives. The protocol’s solvency was consistently maintained throughout the simulated conditions, affirming its robustness and reliability.
Interestingly, despite utilizing different inputs and methodologies, Bumper’s results showcased a remarkable correlation with the Nobel Prize-winning Black-Scholes model. This finding adds further weight to Bumper’s approach and positions the protocol as a transformative force in the financial industry.
Bumper CEO Jonathan DeCarteret expressed his enthusiasm about the potential impact of their innovation, stating, “By challenging and potentially reshaping the accepted norms of options pricing, Bumper stands to revolutionize not just the crypto options market but also has the potential to penetrate traditional finance and disrupt the colossal $13T derivatives market in the future.”
Bumper’s dynamic pricing model, which relies on forward volatility rather than the traditional implied volatility, presents a significant departure from existing approaches. This unique perspective has garnered attention from institutions, fund managers, and retail crypto investors, making Bumper an exceptionally appealing prospect across the entire market spectrum.
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