company profile
Gearbox Protocol is a decentralized finance (DeFi) protocol on the Ethereum blockchain that focuses on providing composable leveraged lending services through credit accounts. Credit accounts are separate smart contracts that store users' collateral and borrowed funds, which cannot be withdrawn directly but can be used for other DeFi protocols supported by Gearbox, such as Uniswap, Curve, and Lido. The agreement was established in 2021 as a non-profit organization Gearbox Foundation and is headquartered in the European Union. Key executives include founder and chief technology officer (CTO) Mikhail Lazarev, co-founders Ilgiz Gimaltdinov and Ivan GBI. With more than 10 years of experience in software development, Mikhail Lazarev is well-versed in blockchain technology, having founded SPB Blockchain Community and Tokenstarter. The protocol is governed by the Gearbox DAO, the governance token is GEAR (ERC20 token), the total supply is 10 billion, and as of February 2024, the DAO holds about 40% of the token supply
regulatory information
As a decentralized protocol, Gearbox Protocol runs on the Ethereum blockchain and is registered in the European Union as a non-profit organization by the Gearbox Foundation. Due to its decentralized nature, the protocol is not directly regulated by traditional financial regulators, but is subject to laws and regulations related to cryptocurrencies and blockchain. The protocol ensures transparency and compliance through community governance (Gearbox DAO), and governance decisions are made by GEAR token holders through voting
trading products
Gearbox Protocol offers the following leverage-related trading products and services:
leveraged trading: Users can trade with leverage on decentralized exchanges (DEXs) such as Uniswap and Sushiswap, with up to 10x leverage.
Leveraged income farming: Participate in income farming in a leveraged manner on protocols such as Curve, Yearn, and Convex to amplify potential returns.
Leveraged staking: Leveraged staking on protocols such as Lido and Rocketpool enhances staking returns.
Other DeFi applications: Supports complex strategies across protocols, such as delta-neutral strategies and arbitrage operations.
These products are implemented through a credit account, where users can borrow funds after depositing collateral, with a maximum leverage factor determined by the Liquidation Threshold (LTV) set by the protocol (Consensys Blog).
trading software
Users interact with the protocol through an Ethereum-enabled wallet, such as MetaMask, or Gearbox's official dApp interface (Gearbox App). Gearbox provides a credit account abstraction layer where users can create smart contract accounts, deposit collateral and borrow funds for leverage. V3 introduces the MultiCall feature, which allows users to perform complex operations with a single transaction, optimizing user experience and gas fees
deposit and withdrawal methods
Deposits: Users participate in the protocol by depositing assets (e.g., ETH, USDC) or providing collateral to the liquidity pool of the Gearbox protocol. Deposit assets are used to provide liquidity to borrowers.
Withdrawals: Users can withdraw funds by closing credit accounts or redeeming assets in liquidity pools. Withdrawals may involve a 1% liquidity provider withdrawal fee, and leverage operations need to be aware of liquidation risk
customer support
Gearbox Protocol's customer support is primarily provided through community channels, including:
Discord and Telegram: Users can get real-time help and community support through the official Discord and Telegram groups.
GitHub: Report technical issues or suggest improvements through GitHub issue tracker
Documentation: The official documentation provides detailed usage guides and technical instructions
Core Business & Services
The core business of Gearbox Protocol is to provide decentralized leveraged lending services and enhance capital efficiency in the DeFi ecosystem through credit account abstraction. Key features of the protocol include:
modularity: consists of multiple smart contracts that can be recombined according to the use case.
Composability: Leveraged funds can be used across multiple DeFi protocols, such as Uniswap, Curve, Lido, and more.
0% Funding Rate: Avoid the funding rate of traditional leveraged markets by using real assets instead of derivatives.
No permissions: Users are free to create complex strategies, such as delta-neutral or hedging strategies.
The protocol serves two types of users:
passive liquidity providers: earn a low-risk annualized rate of return (APY) by depositing assets, similar to Compound's cToken mechanism.
Active users: including traders, yield farmers, and protocols, to enhance capital efficiency by borrowing funds and operating with up to 10x leverage
technical infrastructure
Gearbox Protocol Based on the Ethereum blockchain, smart contracts are developed using the Solidity language. Its core technologies include:
credit account: a separate smart contract that stores user collateral and borrowed funds, with predefined liquidation thresholds and whitelisted assets.
Liquidity Pools: Manage the funds of passive liquidity providers and provide leveraged funds to borrowers.
Liquidation mechanism: Monitor credit accounts through health indicators, and trigger liquidation when the threshold is lower.
The multi-call
protocol is deeply integrated with mainstream DeFi protocols such as Uniswap, Curve, Yearn, Lido, Convex, etc., allowing users to operate in a leveraged manner on these platforms. The v3 version introduces intelligent routing and segmentation pools to optimize transaction efficiency and risk isolation
compliance and risk control system
Gearbox Protocol ensures compliance and risk control through the following measures:
health check: Each credit account has a health factor, which triggers automatic liquidation when it falls below the liquidation threshold.
Liquidation mechanism: Liquidators can liquidate non-performing accounts and receive 5% of the clearing fee, 2% of which goes to Gearbox treasury
Security Audit: The protocol has been approved by ChainSecurity, Consensys Diligence, Sigma Prime, Six smart contract audits by organizations such as MixBytes and PeckShield
Bug Bounty Program: $150,000 in bug bounties through Immunefi to encourage white hat hackers to find potential vulnerabilities
Market Positioning and Competitive Advantage
Gearbox Protocol is positioned as a decentralized leverage provider in the DeFi ecosystem, aiming to become the main leverage service layer on the chain. Its competitive advantages include:
composable leverage: users can freely use leveraged funds across multiple DeFi protocols to enhance capital efficiency.
0% Funding Rate: Avoid the cost of funding rate in the traditional derivatives market by directly using real assets.
Modular architecture: The protocol can be flexibly adjusted according to different use cases to meet diverse needs.
High security: Reduce smart contract risk with credit account segregation and multiple audits.
Community Governance: Gearbox DAO ensures transparent decision-making, and GEAR token holders can participate in governance
customer support and empowerment
Gearbox Protocol Support and empower users through:
Community Support: Provide real-time community engagement and technical support via Discord, Telegram, and the X platform.
Educational resources: Official documentation and blogs provide detailed tutorials covering guidance from basic operations to complex strategies
Governance Participation: GEAR token holders can participate in protocol development decisions through governance forums and Snapshot Voting.
social responsibility and ESG
As a decentralized protocol, Gearbox Protocol is committed to driving financial inclusion by lowering the barrier to entry into DeFi by providing leveraged services that do not require traditional financial intermediaries. The protocol's decentralized governance model promotes community participation and transparency, in line with the principles of openness and fairness of decentralized finance. In addition, the protocol operates through the energy-efficient Ethereum PoS mechanism, which reduces energy consumption and reflects a certain sense of environmental responsibility.
Strategic Partnership Ecosystem
Gearbox Protocol has established strategic integrations with several major DeFi protocols, including:
Uniswap and Sushiswap: Support leveraged trading.
Curve, Yearn, and Convex: support leveraged returns.
Lido and Rocketpool: Support leveraged staking.
Other protocols, such as Maker and EigenLayer, expand the application scenarios of leverage.
The protocol also plans to explore the application of leverage in the field of physical assets (RWA) and non-fungible tokens (NFTs) to further enrich its ecosystem
financial health
Gearbox Protocol has completed multiple rounds of funding, Cumulative funding amount: $8 million, including:
Summer 2021: $2.3 million in seed round.
August 2022: $4.15 million in DAO financing.
September 2022: $1.585 million in DAO financing.
As of 2023, the total value locked (TVL) of the protocol is low, but the TVL is expected to grow gradually with the release of v3 version and more protocol integrations (ICO Drops). The market cap of the GEAR token is approximately $42.2 million (as of December 2022), and the trading volume is $2.45 million in the last 24 hours
future roadmap Gearbox Protocol is currently running v3 version, and future plans include:
Extended Integration: Added integration with more DeFi protocols, RWA, and NFT space.
Optimize leverage: Increase leverage by adjusting the liquidation threshold (LTV), such as ezETH's 10x leverage
, improve user experience: Simplify the operation process through intelligent routing and multiple call functions.
Cross-chain expansion: Explore integration with other EVM-compatible chains to improve cross-chain composability.
The protocol aims to become a major on-chain brokerage service provider in the DeFi ecosystem, providing efficient leverage services
for users and the protocol
