DAO Monthly Update: July 2022
Hello GEARheads,
It has been a wild ride since our last update on Medium. The need for primitives like Gearbox became clearer, with hidden leverage dragging the whole industry down. We won’t opine on what played out with the likes of Celsius or Babel — but on-chain leverage may have helped us steer clear of the carnage we saw. And we hope all creditors and depositors will be safu there.
The bear market has kept us inspired to continue working on building primitives that can help everyone gain capital efficiency (leverage) more safely, both for lenders and themselves. This is what we have managed since I last wrote an update.
All these summer weeks weren’t spent by devs laying in the sun. Well, maybe the operatoooors did. The contributors, though, have passed several important GIPs and are now at the final stages of polishing the V2. Jumping ahead, all things are expected to be completed by mid-Q3, be it the last days of August or the first days of September. So be on the lookout for the next lore drips & be among the first Leverage Ninjas.
Now let’s get into the summer updates step by step.
1. Strategic Round closed. Back to Building!
DAO treasury (operated by financial multisig) has been replenished with $4,150,000 due to the DAO Strategic Diversification Round — with participation from legends like Placeholder, Zee Prime, LedgerPrime, Polymorphic and GCR (no, not the trader ser). A lot of Primes there, huh?
An expenditure of ±2.67% of the tokens was done at a valuation of $150 million. With a one-year cliff and one-year vesting. This was after we had a round of voting through the DAO.
As the process went through, it became apparent that US-domiciled parties neither have the framework to get involved in a no-legal-counterparty-DAO round nor would some DAO members feel safe taking on personal risks. As such, A Capital and Galaxy Digital could not complete the procedure.
That isn’t a significant issue at all as the protocol is already earning some revenue and doesn’t have 50 operators feeding off the treasury! So the runway the DAO has is over a year. That is not counting anything on the token side, revenue by the protocol, and so on. See more in the last section.
2. We need you to delegate!
We like building. We need governors to manage what we build.
That is where active governance comes to play. Recent voting events related to the DAO have seen close to 2000 participants, with an astonishing ±33% of the token holders having voted! That’s a fantastic turnout compared to the most active OG DeFi protocols.
But since snapshot quorums are high for security reasons, it’s still a stretch to make sure that important proposals are adequately discussed and voted on. We get it. Not everybody has the time to track governance constantly or draw up long proposals. Nobody is blaming you for that. We are the same with some of our bags! So, how about you put those assets to good use by delegating them to others that could be involved?
An excellent way to put your tokens to good use is to find delegates with less than ±2 million votes and delegate towards them. This allows a broader set of users to contribute to governing. So make delegation great again, MDMA.
3. So we can govern better
A number of crucial decisions around the DAO were taken in the past few months. Core contributors of Gearbox DAO have their compensations clearly laid out. That puts the contributor count to 15+, with 7 developers (2 smart contracts, 3 backend & analytics, 2 frontend). The total amount granted per month is based on the amount of time each contributor spends. GEAR tokens given will have vesting tied to them.
We have also had a proposal to have Gearbox contracts audited by Consensys. A total of $240k will be spent from the DAO treasury towards ensuring the smart contracts are vetted and safe to use. The payment is split into two phases, with $120k given upfront and another $120k when the audit report is delivered. The audits have already begun, and we should be hearing back soon. The other audits (FYI, V2 will have three audits at the start) have been funded by ex-core remaining funds and do not require the DAO to spend its money on it.
As we inch closer to V2, there has been a need for individual metaDAOs to emerge. These will be specialist DAOs that take care of the more minor decisions without requiring consensus across the DAO.
We have started with launching VIBES — the metaDAO focused on marketing and community building. A budget of 10 million gear, worth $150k, has been allocated towards it through voting + 50,000 USDC. The metaDAO will be responsible for ensuring Gearbox’s discovery through social channels. Consider joining to help more degens discover on-chain leverage!
4. V2 is close to launch!
We are pretty close to launching v2 Gearbox to a larger user base. It has been pre-offered so far to potential users willing to deploy a minimum of $50k in collateral so that big farmers can increase their notional positions to $1M+ with leverage. All we required from users was to provide their address and pre-agree to the collateral requirement.
Assets supported on Gearbox Protocol could soon include the likes of CRV, CVX, Frax and FXS. We have also developed integrations with Curve, Lido, Convex and Yearn. Those all are at the last stages of 3 high-tier audits- in addition to the previous three audits. This will be put for governance to vote on in the next few weeks. The pools and farms shall include the juiciest yet safu pools everyone is already used to across Lido, Curve, Convex, and Yearn.
Speaking of how the risk assessment happens, here is a rough framework:
Some of the features we have been dropping around socials as part of the lore: leverage being able to be at 10x or sometimes even higher; multi call allowing you or a contract to get into a complex position (or out of it) in a single transaction; gas optimization of over 25%, etc. So much brain power and system design has gone into this bad boy! Can’t wait to show.
What kinds of yields can you expect, though? It depends entirely on the amount of leverage at play and the strategy you make yourself. Conservative leverage of ±5 times can generate ±12% in APY on staked ETH. In some cases, we expect users to make yields worth ±20% on stablecoin assets.
Check out what’s being developed & join the Leverage Ninja ranks!
5. Treasury Update
The strategic DAO round closed recently, giving the DAO enough dollars to cover short-term expenses and have resources to scale & do more audits & testing & more. Contributor expenses combine dollars and gear tokens to keep individuals aligned.
As of writing this, ±$4.15 million has come to the DAO’s treasury in exchange for the tokens as part of strategic diversification. Contributors were allocated a further ±1.4 million tokens over the month of work (vested for a few months) as part of GIP-11. A further 10M GEAR tokens were allocated to the Vibes MetaDAO alongside $50k to onboard community members and KOLs. $240K will be transferred to Consensys as part of the audit expenses.
For more detailed information on contributors’ self-reporting and other addresses receiving compensations, please see the DAO Notion.
Disclaimer: Gearbox DAO is a group of enthusiasts, developers, and some companies — contributing to the ecosystem. You should not expect anyone else to work: there are no full-time workers. Anyone is free to work and contribute, and there are some funds to compensate for the efforts — but there is no entitlement in the DAO. Want something done? — Do the work yourself and make a funding proposal! There is no central body overseeing anything, nor should you expect to make any profits with the DAO. You are in control.
6. Speaking of VIBES
All the metrics are gradually growing across the board, even before V2 launch! The community is more active, voting is still as hot as before, and VIBES are spreading across the web to attract newcomers. Have you checked some of the excellent videos & content made by our marketing legends, amplice & allindots? Make sure to play a few videos!
We try to keep our focus on all the important aspects when it comes to a protocol. So, the developer community and researchers can consume the docs-to-be-updated with all the transparent info and open-source code. Community members can earn POAPs and GEARs with the VIBES program. Contributors can work on pushing Gearbox forward… join the movement!
How To Get Involved?
If you would like to join — just get involved on Discord. Discuss, research, lead and share. Call contributors out on their bullshit and collaborate on making things better. Here is how you can follow developments:
- Website: https://gearbox.fi/
- dApp: https://app.gearbox.fi/
- User Docs: https://docs.gearbox.finance/
- Developer Docs: https://dev.gearbox.fi/
- Forum: https://gov.gearbox.fi/t/start-here-forum-rules/
- Blog: https://medium.com/@gearboxprotocol
- Github: https://github.com/Gearbox-protocol
- Twitter: https://twitter.com/GearboxProtocol
- Snapshot page: https://snapshot.org/#/gearbox.eth
- And, of course, the DAO working docs:
