List of Terms
Taker A user of the system who wishes to protect against downward asset price movements. Primary actor.
Maker A user of the system who wishes to earn a yield. Primary actor.
Baker A minor actor who stakes BUMP into the protocol to support it. “Baking” has a separate function from the requirement to stake BUMP by Takers and Makers.
Sentry An external actor (typically an automatic script) which monitors the state of the protocol and triggers updates in state.
Arbitrageur An auxiliary actor who, where available, executes a profit-making trade with the protocol in order to balance its pools.
Deposit A Maker taking a position with the Protocol by supplying USDC. Generates bUSDC.
Position Taken by a Maker or Taker when engaging with the protocol.
Term The lock-in period for a given user’s position. Active until expiry.
Floor An individual Taker’s protection price (previously “barrier”)
Renewal When a Taker or Maker renews their position for another Term. Renewal is a toggled setting on a position.
Discontinue A Taker or a Maker notifying the protocol that they wish to discontinue the automatic renewal of their position.
Close A Taker withdrawing ETH from the Asset Pool. Position Close is only available after the expiry of the Term with a recorded ETH price above the position’s floor. Requires bETH.
Claim A Taker activating their protection and withdrawing USDC from the Capital Pool and Capital Reserve. Position Claim is only available after the expiry of the Term with a recorded ETH price below the position’s floor. Requires bETH.
Cancel [Future] A Taker or a Maker exiting the protocol before the expiry of their Term. Cancellation incurs a break fee.
Redemption A Maker who exists the protocol by withdrawing USDC. Requires bUSDC.
BUMP The name of the Bumper protocol token.
Bond Refers to locking BUMP tokens with the protocol in order to access a position. A Bond is required to access certain protocol functions, such as creating Maker and Taker positions. Bonding does not provide a reward.
Network Incentive An incentive for early participation. Only applies to Makers and Takers.
Asset Pool Primary pool of ETH in the protocol.
Asset Reserve A reserve of ETH that captures new ETH from Taker Premiums, Levies and Fees.
Capital Pool Primary pool of USDC in the protocol.
Capital Reserve A reserve of USDC used to regulate price volatility.
Treasury A fund composed of ETH and USDC that is captured to fund governance-approved activities, such as software upgrades.
The Book Total ETH liability to Takers.
The Liability Total USDC liability to Takers.
The Debt Total USDC liability to Makers. Increments with 𝜀 (epsilon).
Rejection Mode A critical protocol state wherein one or more liquidity ratios diverge from their target (reference) beyond a certain threshold. Indicates a recent volatility scenario that has exceeded design constraints.
Impermanent Loss Where the Capital Pool is lower than the Debt, typically due to Taker Claims.
Realised Loss Incurred when a Maker elects to exit the protocol under a condition of impermanent loss.
Liquidity Ratio A core measure of the protocol’s economic health.
Risk Component Aka “Risk Input” “Risk Indicator”. An input for calculating incentives and pricing for Makers and Takers.
Proximity The difference between a given risk component and its reference.
Reference Aka “Target.” An internal protocol setting (or function) used in calculating the Premium and TBA . References are configurable by Governance and may be either static settings or dynamic parametric functions.
Provision An amount of ETH or USDC set aside for liabilities. ETH provision is controlled by 𝛾 (“gamma”), USDC provision (Takers) is controlled by 𝛿 (“delta”), and USDC provision (Makers) is controlled by 𝜀 (“epsilon”).
Reference Ratio A target Liquidity Ratio.
Mechanism A given functionality of the protocol that has been consciously designed.
Hysteresis The functional characteristic of responding to historical state.
Configuration Protocol settings that relate to static values, configurable by onlyGovernance.
Parameters Protocol settings that relate to tuning parametric functions, configurable by onlyGovernance.
onlyGovernance Relating to those executive protocol functions that are only able to be invoked via a permissioned address.