Jonathan DeCarteret on Bumper's DeFi asset protection

0:21space is really needed right now there's not a lot of tools coming out you know when when d5 started exploding last summer and this is one of those tools that i think is going to be really necessary for protecting your capital and ensuring that you can keep those gains and i'm really excited to dive into the details on how exactly you're doing

0:40that and i would love for you to just kick it off for us to start here with a high level overview of bumper and how you got to creating this innovative solution yeah cool so well listen let me let me kind of be as clear and direct then so bumper has just one objective it is there to protect the price of your crypto assets now how it does that

1:02is really super innovative and we think really clever and unique and ultra efficient and the story for us started back about a year ago when we started to see the emergence of d5 right to do some really meaningful things and we decided to pivot our existing business and kind of look at that d5 space we were just really interested in like okay you've got this really cool

1:25ecosystem with all this kind of composability and innovation that's flooding in and what can we how can we use that ecosystem to solve some of the biggest problems and so we thought let's start at the very top you know the trickiest most complex problem that has been around since markets began is how can we solve volatility and we came up with an idea that's the in

1:48its most childlike way and this is the way that i think is easiest to get it into people's heads okay imagine you own a bitcoin okay you see the price of bitcoin shoot out to say six to three thousand dollars and you kind of think okay that's quite toppy i expect bitcoin to kind of trace back down so you protect the price of your bitcoin at sixty thousand dollars

2:07now as bitcoin does start to retrace down as it goes through that sixty thousand dollar flaw you're swapped into stable coin so if it falls down anymore you can cash out you can redeem at the sixty thousand dollar value buy the dip do whatever you want but likewise if the price recovers and pushes back up above sixty thousand dollars then you're swapped back in to bitcoin

2:30again so what that really neat childlike analogy does is it gives you all the downside protections that gives you all of that upside gain so it's the best of both worlds right the only problem with that child like it now did it just doesn't work right we modeled this about a year ago using hourly minute second and tick data and because of slippage

2:50because of the extraneous costs of amm fees and gas costs they all combine to just just wipe out your underlying asset that you're trying to protect right especially when it's oscillating along its floor it's insane the levels of deterioration you get and so what we able to do and this was in conjunction with a company called block 8 who designed and then delivered haven which

3:16independently pivoted into synthetics but using their engineers and their architects together with our team we were able to build a near-zero slippage engine which is at the heart of bumper and that's what allows us to protect the price of your crypto assets really efficiently wow that's a great intro jonathan and that's really interesting i didn't fully understand the difference between

3:41you know obviously with decentralized exchanges there's not as much functionality that can be executed with stop losses and different kinds of orders and this seems similar to that at first but now you're mentioning that you know if the price goes back up in your example of bitcoin if it goes back up above 60 000 you know on a regular stop loss you

4:00would just be stopped out and you would be out of your position and it's often that you know there's a quick wick down and then it's back up to you know 70 000 and all of a sudden you're out of your position so to be able to protect that upside as well and can continue with that upside i think makes a huge difference right well we definitely see that with stop-loss and

4:20that's a one-way ticket isn't it you know the market if the market takes a dive that's it you're cashed out of your position and the problem with that from what we can see from a you know a more kind of micro level is there a lot of bots out there that are gaming these movements so they're there to kind of just push you out of your position and then kind of buy the dick very quickly

4:40to kind of get that rebound and so you know when you look at the other options that are out there in the marketplace to give you protection right stop loss is obviously a good you know a circuit breaker the other one is obviously options desks right which have been used in traditional finance since 1973 that's a fifth almost a 50 year old technology that we're using right and

5:01it's unbelievable that nothing has come along in the interim period that can offer a more efficient way to kind of give you some kind of hedge and there's a reason for that is because traditional finance is just relying on that really old-school infrastructure and coming back to our original investment thesis on our side was that because d5 and crypto

5:23is so fluid and so automated and so natively smart we're able to do things in crypto that you just can't do in traditional finance and that's why we've been able to create something here that is totally novel and new and you know you compare it to an options desk which you know in my view they are clunky they are expensive they have fixed expiry windows

5:46they're complex what we have with bumper is a is a really easy to use dab that in six clicks you set the price you want to protect you hit that button that's it you can be protected as little as three percent per annum so just think about that is thirty thousand dollars a year to protect a million dollars worth of bitcoin it is account change i agree jonathan

6:12and as you mentioned you know when d5 started kicking up last summer to have this kind of idea and to make it so simple i think you know what i'm seeing is that sort of the unique competitive advantage with bumpers just like protect your assets it's the one-stop shop to do that there are other tools that are trying to create you know order books

6:32functionality like limit orders and stop limits and things like that on top of decentralized exchanges but i think the simplicity is going to be one of the things that's going to help drive adoption to something this simple you know because especially with d fight on the downside there can be a lot of volatility especially because it's sort of tied to

6:53the major coins and everything sort of moves at the same time do you see that simplicity as sort of your number one competitive advantage in getting people to actually use and adopt bumper in the long term yeah for sure i mean i think from the get go once we kind of figured this thing out what we realized is we really wanted this to become a retail

7:16product first right so hence the name right bumper it's kind of friendly it's a little bit you know kind of it has an accessibility to it's not scary and we when we designed the scoping and architectural design for bumper right which took us nine months at the same time we worked with designers on the dap because we wanted it to be really easy to use

7:43so when you'll see our dac which is going to kind of the first part of the protocol launches in three weeks on june the 22nd you'll see just how intuitive that graphical user interface is because you know let's be honest in a lot of d5 protocols it's not and i think they do that on purpose to make it you know a little bit for the for the more kind of geeks in all of

8:05us to kind of utilize but bumper is made for the masses and then you know when you think about this protocol obviously there's a strong retail play there's a massive play for those professional crypto traders that are out there right that have a fiduciary responsibility to take some kind of hedge and then there's a huge opportunity for the inter defy

8:30protocol play so this is where you might have a yearn ethanol and that eth vault is protected at a certain price so it could never drop below that price and we're really really trying to position ourselves just to be that default protection lego block that just plugs into all the other d5 protocols as well as retail as well as institutionals definitely and i was

8:54looking into the launch that's coming up i'm i'm excited to actually try it out myself and i saw that it also integrates the bump token within the platform and that's sort of utilized to help execute the protections can you talk about that functionality is there any other functionality for the bump token within bumper and you know does it create a sustainable

9:15ecosystem overall for the participants yeah listen we've we consider ourselves very careful and considerate designers of protocols and tokenomics right so again from from the very first design layer we really thought about okay what are all the different use cases of that bump token within the protocol and how can we leverage that to ensure that value

9:38is then concatenated time and time again back on to that token value so to put that into context right a user any actor needs to deposit bump to the protocol in order to start using it right then if you are a protection taker you can opt to pay your premium the fee that you pay in bump if you're somebody who's put in usdc into the protocol who is making protection

10:04you can elect to receive your yield in bump token then every actor in the protocol will receive a daily distribution of the bumper token to incentivize them to kind of bootstrap network effects and we're just finishing off the model to allow people who hold significant amount of bump to stake that into the protocol to increase the robustness and

10:26the efficiency of the mo of the model and then of course the cherry on the cake is that bump token is the governance token and this is a dow by design that will be moving very swiftly to community governance so there are about five or six different utility cases that we think will absolutely sustain this the token price and its utility within the

10:48ecosystem yeah i like how it's used on both both sides for the makers and the takers there and i'm excited to see the launch you mentioned coming up very soon i know this is version 1a that's coming out and that's not the full functionality i know you're going to be building it throughout the rest of this year what is coming out in this first launch

11:10yeah well listen we've we have a phenomenal team of coders and developers right which is difficult at this time when the market's pumping to find really good people to be really committed to one project so we have on june 22nd the first release of bumper now what that allows people to do is to deposit usdc into the protocol now if you're the first person to do

11:37that or during the 22nd you will be expecting a apy in bump tokens of 400 and that will run all the way up until mid-september which is when the second part protocol comes out and that's the whole thing then goes live and what we've also kind of added on to this and i think this is again speaks to our kind of level of innovation i think where we're just kind of really honing in on

12:03is that if you do deposit like usdc on june on june 22nd then that also allows you to convert some of your usdc into bump tokens so you get to buy that essentially a private sale price and then at the end of that period so this is kind of coming up towards that september launch we will have a preset and again that will only be open to people who deposited usdc and they'll

12:28be able to buy that bump token before it kind of goes on a public sale and lists on exchanges so what we're trying to do here and this really speaks to our ethos is you know this is a protocol that's going to be around for 10 years plus so we are only interested in people who want to support the protocol over the long term who are committed to it and that is emblazoned by our

12:49vesting schedule so we had an institutional rounds that we conducted back in march we were hoping to raise half a million dollars we raised 11.3 million in a month we declined a further 32 million dollars worth of investment all those all those investors vcs and the team and the founders are all locked up in an 18-month vesting schedule and that speaks volumes to you know the

13:15kind of the long-term view that we and our stakeholders stakeholders have in this protocol definitely i saw that raise and it's very impressive that you had to turn down you know three times the amount of money oversubscribed because this is obviously a solution that is very needed in the in the d5 world and these these people can see that and it's excited it's exciting to

13:40have all that backing and be so close to the launch here and to have the long-term interest of all these investors and yeah the i think that everyone's on the same page when they see that we're still at the beginning of d5 and it's going to be years down the road that this is going to continue to grow and so with that what do you see as one of the

14:04main key factors to success way down the road you know so that your investors 10 years down the road will be still with you and supporting the platform and hopefully will be exponentially widespread and adopted yeah well that's really good question isn't it because i think when you when you kind of look at the macro picture with d5 right then what i feel

14:31has happened is if you look at if you look at fintech overall then over the last kind of 10 20 years what it's done is it's taken traditional finance and it's just kind of automated around the edges right and kind of made that easier to work and to use right but nothing fundamental has changed within the plumbing of traditional finance what defy does is it will just eat

14:56traditional finance from the inside out and just totally replicate it right and we're starting to see beginnings of that right this is this is the flint of a an absolute revolution in how financial instruments and structured products interact with each other in an ultra efficient way and where we see bumper being a part of that is really leading that kind of

15:23innovation curve right so to answer your question right so for those investors in 10 years like what is bumper going to look like then we've got some ideas of where we want to go right so at the moment this is an e5 this is a d5 play right this is this is the hardcore of bumper right so at the at the beginning we're starting off just with eth and usdc they're the pairs

15:44so we're kind of balancing together and then in release two which will be coming out in q4 this year and we're already starting the scope to design that is all about expansion and extending that out right so on the unstable asset side we'll be expanding to all the larger cap erc20 tokens wrapped bitcoin on the stable side will be multi-denominated stable coins usdc to t

16:08die so forth and we can come up some really clever things there we could have one really big stable coin pool and then lots of unstable coins that are all kind of being balanced with that larger one so it's which makes it super efficient then obviously we have kind of interoperability it's a different chain so kind of looking into kind of finance smart chain for instance

16:30and obviously layer two mechanisms to speed up then we'll be running in straight into the staking of eef which will hopefully kind of bring down the gas fees and kind of give us a higher transaction speed and then you kind of start to branch out a little bit out of d5 so you kind of start thinking about well can we take traditional equities like tesla litecoin

16:53tokenize that and then bumper that and that it can do straight off the bat right so there's no problem with incorporating that and then you start looking at things like collateralized debt positions right which if you want to borrow if you've got ethan you want to borrow heath then you'd obviously deposit the ether that you have in order to borrow

17:12more but the if you've deposited because it's unstable asset is liable to get liquidated out if you're bumping that's impossible that will never happen because the protocol will always stand by that flaw that you're protecting and then you start to move into the to the traditional world and this is where we think you know kind of circles back to the point about d5

17:32eating traditional finance inside out because what we would be able to do is create an institutional version of bumper so that's where there will be a kyc aml filter on each end so that everyone knows they're interacting with kind of qualified entities but there is nothing to stop us taking any bond any stock any equity any derivative in traditional finance and start to

17:55bumper that so this protocol has got a huge a huge map of where it can go very exciting and a lot of potential as we continue to eat up the traditional financial world with defy so very exciting jonathan thank you so much for taking the time to come on for the viewers that are looking to follow this version 1a release and get on bumper right when it comes

18:19out here what's the best way for them to get involved yeah thanks man so bumper.fi bumpify is our website so just go there just register and there'll be an invitation sent out on june 22nd when the protocol goes live you deposit usdc and then you can start earning bump you can buy bump and be part of the movement sounds great i will leave that link for

18:44bumperfy in the description box below all the best with the upcoming launch and let's follow up in the near future thanks buddy take care man thank you