Autonomy Capital & Bumper Finance

Intro

TL:DR

  • Innovative idea that addresses a real pain point
  • Very easy to use
  • Developed by Block8 which had a hand in developing Synthetix
  • Revenue model well designed, for profit organization
  • The team are veterans in the Crypto space

COMPONENTS

  1. Volatile assets pool- asking for protection , ETH is the first asset on the roadmap with WBTC soon to follow. Other assets will be added as liquidity grows
  2. Stable assets pool- providing protection, USDC liquidity

TAKING PROTECTION

  • Users protect their assets by attaching a wallet to the Bumper Protocol Web3 dApp. Bumper charges a nominal floating daily premium, which proportionally drops as the protected asset price increases in value.
  • Users choose the amount and price of ETH to protect (further assets will be added in future releases of the protocol as described above).
  • In return, the protocol locks the ETH in the Bumper smart contract and debits back a corresponding amount of Bumpered ETH (bETH).
  • bETH is a fungible token that represents a claim over the underlying asset pool at a secured price point.
  • To end protection, users send their bETH or equivalent value back to the protocol.
  • Bumper then reconciles and returns the protected amount, minus any premium fees back to the user’s wallet.
  • Users can jump in and out of protection as often as they wish.

LIQUIDITY PROVISION

  • Liquidity providers use the Bumper Protocol dApp to send USDC to the protocol to receive a yield (further stablecoins will be added in future releases).
  • In return the protocol sends the user a corresponding amount of Bumpered USDC (bUSDC). This is a fungible yield -bearing token, pegged to USDC, but which increases correspondingly over time due to the accrued yield. You can transact and trade this token as you would any other.
  • Users who wish to withdraw their USDC can simply redeem their bUSDC from the protocol and Bumper returns their original supplied USDC plus accrued interest back to the user’s wallet.
  • Every position that is created debits or credits a respective number of assets from the Liquidity Reserve or Asset (non stable) pool.
  • Fungible bAsset tokens take their place, representing a share on either the corresponding asset pool, or a claim on the Reserve, at an agreed price.
  • The protocol imposes a minimum period before changes to a given position can be made.
  • Bumper dynamically reacts to the aggregate amount of liability presented by the Asset pool as the ratio of Asset pool to stablecoin reserve will vary as Takers and Makers open and close their positions.
  • Moreover the protocol is segmenting Maker risk into a tranched hierarchy and measures a set of ratios against the relevant risk settings in order to understand the current liability of the Reserve and in order to calibrate the premiums to attract the necessary liquidity to keep the ratios within the defined risk boundaries of the system.
  • The above mentioned modulation will be programmed via a function that is upgradable by the governance (first order incentives) and should these first order incentives fail to bring the ratio back to balance, the protocol itself will open up to arbitrage bots and community permissioned trades .
  • Any resulting realized loss will be significantly mitigated, if not completely resolved, by the redistribution to the higher incentivized tranches, with a final backstop prudential capital reserve to manage any realized debts.
  • Depending on the volatility level of the market the protocol will distribute premium fees based upon risk appetite, so makers who believe volatility is temporary can move to higher tranches and earn greater yields or vice versa.
  • The Prudential Capital Reserve is a USDC reserve that kicks in if all the rebalancing mechanisms prove insufficient to bring back ratio equilibrium.
  • Bumper will basically be the savior of last resort.

REVENUE MODEL

CONCLUSION

About Autonomy Capital

DYOR

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