So if you are tuned into the Ethereum chain happenings, you probably noticed that a new gas guzzler emerged from the depths of Vitalik’s masternode yesterday.
Yes, I’m talking about @GearboxProtocol
But what is ⚙️🧰 and why should you care at all? Here comes the threadooooor👇🏻
Yes, I’m talking about @GearboxProtocol
But what is ⚙️🧰 and why should you care at all? Here comes the threadooooor👇🏻
1/ The simplest way to conceptualise Gearbox is “generalised leverage-as-a-service”
Put some collateral forward, get a multiple of your deposit back in a credit account, and then point it at whatever you like.
Put some collateral forward, get a multiple of your deposit back in a credit account, and then point it at whatever you like.
2/ Trade on DEXes? Can do.
Leveraged yield farm? Can do also.
Risk manage by minimising your principal exposure? Check.
Deploy complex strategies that require size? Yussss.
Leveraged yield farm? Can do also.
Risk manage by minimising your principal exposure? Check.
Deploy complex strategies that require size? Yussss.
3/ In essence you have a two-sided marketplace of LPs on the one side and borrowers on the other, that is optimized for the leverage use case.
No cumbersome round trips to Maker CDPs, more capital efficiency, and no sandboxing on where you can direct that leverage.
No cumbersome round trips to Maker CDPs, more capital efficiency, and no sandboxing on where you can direct that leverage.
4/ It’s actually an elegantly simple concept.
Unbundle the leverage function from the exchange apparatus and make it composable with literally anything.
Unbundle the leverage function from the exchange apparatus and make it composable with literally anything.
5/ Now the protocol is launching as a DAO on day one, with some super interesting mechanisms that will power it.
For one the voting power of early contributors/investors and team is dampened for several months.
Their participation will happen on equal terms to the community.
For one the voting power of early contributors/investors and team is dampened for several months.
Their participation will happen on equal terms to the community.
6/ Also the bootstrap airdrop dynamics were carefully designed to get the most relevant of parties engaged—and onchain history had a big role to play here.
7/ Filtering for Defi power users, Gearbox invited a whitelist of 56k addresses to mint GEAR tokens by deploying part of the protocol, in a process dubbed “credit account mining”
8/ Credit accounts are smart contracts that essentially are the leverage vehicle inside the protocol.
It is where the leverage gets deployed and the account from inside which a user directs their loaned funds.
These will be finite and reusable.
It is where the leverage gets deployed and the account from inside which a user directs their loaned funds.
These will be finite and reusable.
9/ Essentially once I am done using Gearbox, I can close my account, and after my collateral gets returned and I go on my merry way, someone else can use the same account after me.
This will save users on cost and reduce the externality surface on the L1.
This will save users on cost and reduce the externality surface on the L1.
10/ So why does all of this matter? A few reasons actually.
Imho Gearbox is one of the most novel protocols to launch on Ethereum in 2021, coupled with one of the most novel protocol launch cadences.
The best part? The whole concept is actually not that hard to grok.
Imho Gearbox is one of the most novel protocols to launch on Ethereum in 2021, coupled with one of the most novel protocol launch cadences.
The best part? The whole concept is actually not that hard to grok.
11/ Here, let me show you why it’s interesting in two pictures.
…
How did I do?
…
How did I do?
12/ Kidding aside, what’s max cool is that it is designed as a pluggable primitive.
This implies that, on aggregate, the introduction of Gearbox to the ecosystem enhances economic optionality for Ethereum Defi users.
And those users will be equally individuals and protocols.
This implies that, on aggregate, the introduction of Gearbox to the ecosystem enhances economic optionality for Ethereum Defi users.
And those users will be equally individuals and protocols.
13/ I can almost imagine a world where other protocols not only integrate Gearbox’s leverage-as-a-service, but also become LPs to get more utilisation out of their AUMs.
Aaaaaaah the circular economy ♻️
Aaaaaaah the circular economy ♻️
14/ @mikaellazarev @apeir99n and @ivangbi_ have done an incredible job in bringing Gearbox to almost-Mainnet.
Gotta say I’m both proud and thankful to have made a small contribution to their work thus far.
But now the real challenge begins.
Gotta say I’m both proud and thankful to have made a small contribution to their work thus far.
But now the real challenge begins.
15/ Come next week when the DAO launches fully, nons, anons, frogs and humans of CT have the opportunity to step up, and get involved in the Gearbox DAO on equal terms.
This is your chance to make Defi history.
Don’t sleep on it 🤓
This is your chance to make Defi history.
Don’t sleep on it 🤓
Loading suggestions...