Bumper Docs
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  • Learn
    • What is Bumper?
    • Documentation Structure
    • Why Use Bumper?
      • Comparison with stop-loss
      • Comparison with options
    • BUMP Token
      • Overview
      • BUMP Token Ecosystem
        • Design Background
        • Token Utility
        • Token Network
          • Network Bond (Primary Utility)
          • Network Incentive (Primary Utility)
          • Representative Governance (Primary Utility)
          • Network Boost (Secondary Utility)
          • Staking (Secondary Utility)
        • Roadmap
        • Token Metrics
          • Token Details
          • Token Emission
        • DAO Governance
          • Current Status
          • Future Status
    • Staking
    • Guides
      • Connect a wallet
      • Hedge - Open a position
      • Hedge - Exit a position
      • Hedge - Renew a position
      • Earn - Open a position
      • Earn - Close a position
      • Earn - Renew a position
      • dApp Interface
        • Dashboard
        • Hedge Positions
        • Earn Positions
      • Risk Rating
      • How do I add my BUMP to Metamask?
      • How do I add my bUSDC token to MetaMask?
      • How to buy BUMP on Uniswap
      • Liquidity Mining
        • How to Participate In Bumper’s Liquidity Mining Program - A step-by-step guide
      • Troubleshooting
      • Use cases & strategies
      • Legacy Guides
        • How to unstake & claim rewards from legacy staking
        • Claiming vested BUMP tokens
        • Withdrawing liquidity from Bumper's legacy LP program
        • Claiming BUMP tokens for Public Sale Participants
    • Protocol Risks
      • General risks
      • Taker liquidations
      • Maker liquidations
    • Premiums and Yields
    • FAQs
    • Troubleshooting
  • Protocol
    • Overview
      • Preliminaries
      • User Positions
    • Premium
      • Price Risk Factor (PRF)
      • Liability Risk Factor (VRF)
      • Probability of Claim
      • Liquidity Risk Factor (LRF)
      • Computing the Premium and Updating State
      • Visual Representation of Premium
    • Rebalancing
      • Cross-Side Rebalance and Swap Deadband
      • Asset and Capital Ledger
      • Rebalancing Trade Grid
      • Computing Swap Amounts
      • Same-Side Rebalancing
    • Taker Lifecycle
      • Taker Optionality
      • Taker Share
      • Taker Fungibility
      • Taker Position Token
      • Taker Risk Rates
      • Taker Renewal
      • Taker Close and Claim
      • Taker Position Expiry
      • Taker Ejection
      • Taker Cancellation
    • Maker Lifecycle
      • Maker Optionality
      • Maker Share
      • Maker Fungibility
      • Maker Position Token
      • Maker Risk Rates
      • Maker Withdrawal
      • Maker Renewal
      • Negative Yields
    • Simulation
    • Glossary
  • Governance
    • Overview
    • DAO Overview & Structure
      • Purpose of the DAO
      • Committees
      • Forum
      • Quorums
    • Economic Settings
      • Parameter tuning
      • Community involvement
    • Voting Power
      • vBUMP
      • Staking & Locking
    • Bumper Improvement Proposals (BIPs)
      • Before a proposal is created
      • Raising a proposal
      • Committee review
      • Warmup Period
      • Voting period
      • Grace & Queue periods
      • Abrogation
    • DAO user guides
      • How to Stake tokens in the Bumper DAO
      • How to Unstake tokens in the Bumper DAO
      • How to Claim Staking Rewards in the Bumper DAO
      • How to Lock tokens in the Bumper DAO
      • Delegating vBUMP
      • How to Undelegate vBUMP in the Bumper DAO
      • Voting on a governance proposal
      • Cancelling a vote
      • Voting on an Abrogation Proposal
      • Creating a Proposal in the DAO
      • Execute a proposal in the Bumper DAO
    • DAO Legal
  • Developers
    • Architecture
    • Modules
    • Contract Address List
  • Community
    • Community Code of Conduct
    • Alpha
      • Feedback and Support
      • Reporting Bugs
      • Connecting to Bumper network
  • Security
    • Audits
  • Legal
    • Terms and Conditions
    • Disclaimer
    • Privacy Policy
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On this page
  • 1. Protection Against Downside Volatility
  • 2. Avoid Unintended Consequences of Stop Loss
  • 3. Lock in Profits
  • 4. Earn Yield by Providing Stablecoins
  • 5. Ideal for New and Seasoned Crypto Users
  • 6. Mitigate Liquidation Risk
  • 7. Decentralised and Trustless
  • 8. Simple to use
  • 9. Bumper is price efficient
  1. Learn

Why Use Bumper?

Bumper is a revolutionary DeFi risk market that offers unique crypto price protection, providing a safety net against the volatility of the crypto market. It serves as a solution for both crypto holders looking for downside protection and those seeking to earn a yield by providing stablecoins to the protocol. Here are some compelling reasons why you should consider using Bumper:

1. Protection Against Downside Volatility

Bumper allows you to protect your crypto investments against market dips. If you're unsure about whether your newly purchased crypto will bounce off support or crash, Bumper provides a safety net. If your token takes off, the premium is likely to be cost-efficient compared to buying a Put Option.

2. Avoid Unintended Consequences of Stop Loss

Bumper in some ways is similar to a stop loss, providing protection from downside swings in price, but unlike a stop loss allows you to enjoy upside gains without the need to keep your tokens on a centralised exchange.

3. Lock in Profits

When approaching all-time-high territory, it's hard to predict where the top is. Bumper can lock in your profits should a correction occur, ensuring you won't miss out on further gains. This is a significant advantage over a stop loss, which could potentially lock in a lower profit than intended.

4. Earn Yield by Providing Stablecoins

Bumper isn't just for those looking to protect their crypto assets. If you're looking to earn a yield, you can provide stablecoins to the Bumper protocol. This allows you to earn a return on your stablecoins while contributing to the stability of the crypto market. Bumper’s protocol is designed to provide a fairer and simpler solution compared to selling options.

5. Ideal for New and Seasoned Crypto Users

Bumper protects the value of your wallet when taking your first steps into the crypto world, providing peace of mind while learning more about the crypto-sphere.

For more experienced crypto users, Bumper allows you to do more with your crypto, making the management of both taking protection from downside volatility and earning yield simple and more price efficient.

6. Mitigate Liquidation Risk

Bumper can be used to protect your collateral before taking out a DeFi loan. This mitigates against liquidation should the market crash, as your Bumpered asset always has a minimum floor value.

7. Decentralised and Trustless

Unlike traditional financial systems, Bumper is a DeFi protocol, meaning there is no central authority or intermediary controlling the system. Instead, Bumper is powered by smart contracts on the blockchain.

8. Simple to use

Options desks are complicated, and generally attract more sophisticated investors with large capital reserves. Bumper in comparison is very simple, requiring just a few clicks to open a position.

9. Bumper is price efficient

Bumper is on average a more cost-effective solution than buying options


In conclusion, Bumper provides a simple, cost-effective, and reliable solution for both protecting your crypto assets and earning a yield. Whether you're a seasoned crypto investor or a newcomer, Bumper’s open, transparent, and democratic solution offers a range of benefits that make it a valuable addition to your crypto strategy.

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Last updated 1 year ago