Gearbox is a generalized leverage protocol on Ethereum. It has two sides to it: passive liquidity providers who earn low-risk APY by providing single-asset liquidity; and active farmers, firms, or even other protocols who borrow those assets to trade or farm with even x10 leverage.
Gearbox Protocol allows anyone to take DeFi-native leverage and then use it across various (DeFi & more) protocols in a composable way. You take leverage with Gearbox and then use it on other protocols you already love: Uniswap, Curve, Convex, Lido, etc. For example, you can leverage trade on Uniswap, leverage farm on Yearn, make delta-neutral strategies, get Leverage-as-a-Service for your structured product, and more.
- Composable. Gearbox does not have its own order book or trading environment. The leverage you get - is used across multiple DeFi protocols and assets, fully composable! For example, a yield aggregator can be on the liquidity provider side of Gearbox Protocol, as well as be an avenue for Gearbox users to deploy their leverage into.
- 0% Funding Rates. The leverage offered is not based on derivative positions but is instead executed with real assets on third-party protocols. Because Gearbox does not create its own trading pairs, there is no short/long ratio that needs to be maintained with funding rates.
- Leverage as a Service. Other protocols can offer leverage to their users with the help of Gearbox Protocol, without modifying anything in their own architecture. As such, they also get exposure to the user base of Gearbox.
- Permissionless Strategies. Positions and trades within Credit Accounts can be extended to include complex strategies, for example, making a short position farm in Yearn; or having LP tokens as collateral for more composable actions. In fact, you can make all of these complex things easier to ape into, by using Gearbox's unique multicall features.
- Low overhead on gas. Due to how data and operations are processed across isolated smart contracts, gas usage overhead is reduced to an insignificant overhead. Learn more.
Gearbox protocol has two sides to it:
Passive lenders - liquidity providers who seek passive yield and prefer lower risks. This can be seen similar to providing liquidity to Compound and getting cTokens back. LPs' assets are utilized by others, for which they get APY. Any one can be a liquidity provider on Gearbox. Visit here to know more about Gearbox's liquidity providers.
Borrowers - active traders, farmers, and even protocols who wish to increase their position by borrowing liquidity from the protocol at multiples of their collateral. The liquidity they borrow can be 10x of what their notional size is. Visit here to know more about Gearbox's traders and farmers.
One of the key aspects which actually makes this DeFi primitive possible are Credit Accounts (and Credit Managers), which “bind” together lenders and borrowers in this equation. More specifically, a Credit Account is an isolated smart contract that holds user + borrowed funds, has liquidation thresholds, and has a list of allowed tokens and protocols (in order to avoid attack vectors from malicious actors, like borrowing leverage and buying a self-created ERC20 token; or sending an amount to a malicious smart contract).
Visit here to know more about Gearbox's credit account.
Gearbox does not silo the assets within its protocol.
All trades and operations happen on third-party protocols: Uniswap, Curve, Yearn, etc. Your assets never end up in custody of any one person or company. As such, Gearbox Protocol is not a trading platform / protocol. The protocol does not have its own order books, or control the secondary market liquidity. Therefore, there are no funding rates.
GEAR token is an ERC20 utility token, starting off as a governance token for the protocol - and then possibly taking any other new function the DAO could envision for it. The supply of GEAR is capped at 10,000,000,000 (10 billion) which can't be technically changed.
GEAR token started as non-transferrable. That can be changed by DAO voting.
- Token contract: 0xba3335588d9403515223f109edc4eb7269a9ab5d
- Decimals: 18
- Symbol: $GEAR
GEAR supply has been split according to a handful of contributor groups.
