Gearbox (GEAR)

Gearbox is a generalized leverage protocol. In essence, the protocol brings about “composable leverage” by allowing users to deposit collateral and borrow from a segregated pool of capital which they can then bring to any whitelisted protocol in DeFi.

Basics

• Based in:
• Started in / Announced on:
• Testnet release:
• Mainnet release:

Audits & Exploits

• Bug bounty program can be found [insert here].
• "These smart contracts have been audited by ChainSecurity, Sigma Prime and Consensys Diligence." (13-4-2023)

Governance

Admin Keys

• From Our Network (11-11-2022):

"Since Gearbox is currently limiting Credit Account access to whitelisted Leverage Ninjas, with the intent of limiting risk, the recent growth in CAs reflects only a fraction of the total demand to use the protocol. The protocol will fully remove the whitelist in the future, but there seems to be early PMF with borrowers."

Token

Utility

• Gearbox is governed by the GEAR token, which is non-tradable (15-4-2022).

Technology

• Whitepaper or docs can be found [insert here].
• Code can be viewed [insert here].

Implementations

• Built on: Ethereum (13-4-2023)

How it works

• From Dose of DeFi (30-5-2024):

"Gearbox provides an opinionated framework that is more user centric, i.e. users can easily set up their positions without too much oversight, regardless of their skill/knowledge level. Its primary innovation is a “credit account” which serves as an inventory of allowable actions and whitelisted assets, denominated in a borrowed asset. It’s basically an isolated lending pool, analogous to Euler's vaults, except that Gearbox's credit accounts hold both user collateral and borrowed funds in one place. Like MetaMorpho, Gearbox demonstrates that a modular world can have a layer that specializes in packaging for the end user."

• From Decentral Park Capital (13-4-2023):

"Gearbox Finance is a DeFi primitive that enables DeFi native leverage, by this I am referring to the ability to gain leverage within existing DeFi applications, such as gaining 3x on a Yearn Finance stablecoin strategy. In this sense, Gearbox can be thought of as a composable leverage protocol, built specifically on the Ethereum network.

Gearbox is a double-sided marketplace, with liquidity being provided to the protocol by users opting to earn a yield on their assets as a share of protocol revenue and GEAR emissions. These assets are then provided to speculators looking to borrow with leverage on their collateral. Speculators can borrow up to 10x their collateral and can use this within whitelisted DeFi protocols or predefined strategies.

Gearbox can offer leverage through its ‘Credit Account’ feature. Users create credit accounts by depositing assets as collateral. All capital, both the collateral and borrowed leveraged assets are retained within smart contracts, meaning the capital is non-withdrawable. The speculators make decisions on how their funds within the credit account, structured as this smart contract, will be used, i.e. they can deposit to Uniswap, Yearn, Curve etc., but never actually have access to the funds from a self-custody perspective. This solves for DeFi’s inability to claw back funds if necessary, although does require users to deposit capital to Gearbox smart contracts. These smart contracts have been audited by ChainSecurity, Sigma Prime and Consensys Diligence.

Credit accounts are currently in beta, meaning only whitelisted accounts can borrow with leverage on Gearbox. As it stands there is a $100k minimum borrow (equivalent to a $10k minimum deposit) for these whitelisted addresses. Once credit accounts move out of beta, Gearbox will be fully live on the Ethereum mainnet.

Liquidations in Gearbox are permissionless, and performed by opportunistic degens. The fees associated equate to 5.5%, of which 4% goes to the liquidator, and 1.5% goes to the protocol. Total protocol fees are made up of this 1.5% liquidation fee, in conjunction with an APY spread fee of 50%."

• From Our Network (11-11-2022):

"Gearbox allows users to deploy leveraged positions across DeFi protocols and enable boosted APYs in a composable manner. On Gearbox, LPs supply funds to pools in order to earn interest. Borrowers create a Credit Account (CA), deposit collateral, and obtain up to 10x leverage from the LP pools directly. CA users can then deploy the levered capital on popular DeFi protocols."

Upgrades

• From Decentral Park Capital (13-4-2023):

"Gearbox V3 is expected towards the end of Q2 2023. What is their V3 upgrade? It’s the latest product iteration on Gearbox’s way to becoming fully functional. Interestingly though, the upgrade does not contain any edits to the core codebase of Gearbox V2, instead, V3 introduces the addition of new features to their reliable codebase.

So what are these new features? Gearbox will introduce a new passive lending pool, i.e. LPs supply assets to the protocol in return for a yield. This lending pool has been coined the ‘Alpha Pool’, and has been created for more exotic assets and protocols. New integrations include Balancer and Aura Finance, with support for Curve Crypto pool, MIM pools and cbETH deployments. "

Roadmap

• Can be found [Insert link here].

Usage

• From Our Network (11-11-2022):

"Since V2 launch on Oct 31, TVL and capital borrowed on Gearbox have increased more than 10x to $100m and $70m, respectively. Currently, the most popular strategies are leveraged stable farming: LUSD3CRV-f and FRAX3CRV-f account for 69% of CA assets."

Team, Funding and Partners

Team

• Full team can be found [here].

Funding

Prisma; "Amplice and Ivan from GearBox" were part of the first Prisma round (31-5-2023)

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