GEAR Token and Governance: Reverse Voting Escrow

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Gearbox Protocol ⚙️🧰

8 min readDec 10, 2021

*They came from nowhere yet somewhere. They are organized and persistent. They took the parts and put them together. Thanks to you, everyone! Gib tokens.*

We’re in the middle of the launch ceremony — you know it, right? If not, see the DAO-First Launch timeline. So, what do we have for today?

Today, our planet is being invaded by the jawas, empire clones, the jedi, and other galactic species! But wait a second… it’s not an attack. They are all getting together to form a DAO 🌌 And yes, if you thought Rick&Morty references were cringe — we have more where this came from. We are sorry.

GEAR token: 0xba3335588d9403515223f109edc4eb7269a9ab5d

DAO-First Launch: what is it?

Gearbox Protocol is neither an Andre-style full on fair launch (pardon, we are not as altruistic) — nor is it akin to a centralized protocol which retains admin keys while growing and then gives ownership to a DAO after a few months. There is nothing wrong with either model, it’s just that this time it’s different.

Gearbox ships the final code to the community (next week) without even knowing what the PMF is… “That’s plain stupid!” — you might say. Well, could be. But it also allows the community to take ownership of the protocol from day zero or even -1: decide on pools and assets (coming up soon), multisig signers, and everything else! See it like this:

Core team (initial core members) built it all out;
Some people from outside helped with dev, product, audits, capital;
Community helped with testing, ideas, and their efforts.

Bam, done! All these groups get GEAR (1 & 2 get long vesting, 3 gets no vesting) and then they have to coordinate & do something. That’s it! Now let the narrative unfold as everyone has a say from the very beginning.

See the phases here (constantly being updated):

DAO-First Launch

The path to decentralization and community governance.

docs.gearbox.finance

Governance: Reverse Voting Escrow

When it comes to growth and development of any DAO, project, or even company — there are multiple different people involved — with very different skill sets and different opinions. That’s what allows things to grow beyond the initial tunnel vision. Therefore, the goal of the distribution is to ensure that Gearbox DAO will also have those different groups of people: developers, whales, small community members, governance participants, meme lords, users, potentially liquidity miners, etc.

“Ivan, you are a liar! We all know that DAO portions are controlled by early whales, so don’t try to fool us!” — well, you would be right if that were actually to be the case. With Gearbox, initial core members and contributors have a dynamic voting reduction starting as low as x0.125 and x0.250, turning whales into shrimps. Why?

Problem 1: whale portions dominating governance as voters;
Fix -> community delegators to unite small holders.
Problem 2: whale portions delegating and still dominating;
Fix -> limit governance weights of whales completely.

Watch from 2:49:15 on YouTube by ETHGlobal

Turning whales into shrimps, and vice-versa!

While it’s not unnatural for initial core members and contributors to have larger token percentages than regular smaller users (either by early investment, or by early farming, or by just being richer) — it is however a problem for early governance. If small holders have no opportunity to coordinate and price out the larger holders together — governance can be seen as flawed. As such, Gearbox DAO in the early stages — thanks to snapshot mechanics — evens out the playing field by making sure community members have higher voting power than early members.

Community members including Credit Account Mining, Early App testers, and early Discord legends: x1 multiplier.
Contributors A meaning initial core members: multiplier of x0.125
Contributors B meaning initial contributors: multiplier of x0.25
Company wallet: cannot vote on anything right now.
DAO wallet: cannot vote (unless it gives grants which get x1 multiplier).

It’s really the community that can control the DAO portion: as you can see, both the early contributors and initial core members are about 20% each — whereas is the rest are community distribution stages given to users, testers, and other external early members. Read about that in the next section.

In terms of eligible votes percentage, you need to subtract the DAO portion (51%) and company wallet (11%), as well as reduce early contributors voting weights. Given that initial core members voting weights are being reduced from 20%->2.5% and initial contributors from 9.20%->2.3% — it is almost impossible for early members to pass whatever they want on their own. As such, the quorum of 2% from the 12% of the available votes, is actually a 17% quorum of eligible votes for a winning vote.

Community having over 8% is the deciding factor.

ah I am governiiiiing, please be good governors sers

Some more things about Gearbox Protocol governance setup in the early days, while you can find a complete list of how-to and all the details here:

Governance Model

Early governance: forum + snapshot + multisigs.

docs.gearbox.finance

Delegation is available to streamline community work
A minimum of 3 days period must be selected on the snapshot
Minimum 0.02% of total supply to make a snapshot proposal
A winning voting choice must also have > 2% total supply quorum
Company wallet is not allowed to vote.

Next to the voting rules explained above, the role of the executioner falls on the shoulders of two multisigs which will also be voted in by the DAO: technical multisig for the protocol and a treasury multisig holding GEAR and protocol earnings. On that note, multisig information can be found here.

Community GEAR Distribution

Assemble to the main engine, gearpersons! Also, please ask the illustrator next time to not make all contributors and community members look like NPCs.

Anybody who is not a community member is locked for a minimum of 1 year since launch. All of the vestings can be verified on-chain, no trust required. Community retains the largest portions both in terms of the distribution and voting weights. You would be able to check those by going to the TokenDistributor contract when it is deployed. PS: sorry, Larry, but there is a 1year long vest and 1 year vesting + more after that.

You can check those by going to the TokenDistributor contract: 0xbf57539473913685688d224ad4e262684b23dd4c#readContract
- check contributorsList [2] to find yourself/someone;
- fill in your/eligible address from [2] into [10] vestingContracts. That will give you the corresponding personal vesting contract for that address;
- you can also check [12] and [13] for the weight multiplier. For example, if it’s 1250 — that means it’s x0.125 — this is the reduction early contributors get. FYI, Contributor A = early contributors, Contributor B = initial core members and initial external.

Community portion is almost 1:1 with early contributors aka investors, while community has a 4x multiplier in comparison to them + no vesting.

Credit Account Mining: 5%. For 5,000 in equal portions — that is 100,000 GEAR per account mined. One address can mine one Credit Account. There will be a static UI, matching the merkle to make the process more accessible. The list of eligible addresses and the conversation is here:

Credit Account Mining

This page is under construction.

docs.gearbox.finance

Early App Testers: 1.267%
Early Discord Legends: 0.476%

For testers & Discord, the contract and the distribution with claim process will be set up for both groups in the coming weeks. Since GEAR is not going to be transferrable at first, there is no issue with getting your tokens a little bit later. Stay tuned for that! For now, you can try to articulate and object criteria, but keep in mind that the process was already inclusive.

Discord Legends: top-100 get 250,000 GEAR. Top 101–251 get 100,000 GEAR. Top 252–502 get 30,000 GEAR. Thanks for your support and activity! The snapshot has been taken for the early legends, and there will be no new airdrops or giveaways, bots & such inquires will get instaban. Snapshot was taken around evening time of December 6.
Early App Testers: 2–10 actions (approvals transactions do not count as such) get 20,000 GEAR. 11–21 actions get 30,000 GEAR. 22+ actions of thorough relentless testing get 100,000 GEAR. Snapshot was taken at Kovan block 28668076, end of the day of December 7.

Distribuion of addresses per actions they made in testing.

For Discord users, the data has been scraped and sorted as longest messages + the number of messages. If you take any message in terms of its length and cross-check, 99% change you will get a quality tester response. For testers, the results were gradual (kinda good).

FULL TRANSPARENCY: github.com/Gearbox-protocol/launch-snapshot

Check your wallet and how the filters/score were set up:

Early Community Snapshot GEAR

TESTERS LIST address,Number of actions,Airdrop tokens 0xacb272eac895fa57394747615fcb068b8858aaf2,108,100,000…

docs.google.com

So just like the little jawas, if you were very active, you could have taken a part in every different part of Gearbox launch:

+have some governance votes in the wallets from the past,
+helped others in Discord and gave ideas,
+thoroughly tested the app and left feedback.

CA Mining + 250,000 + 100,000 = 350,000 + X GEAR

INFO: GEAR token is an ERC20 utility token, starting off as a governance token— 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 changed. See that in source code. GEAR token starts as non-transferrable. That can be changed by DAO.

Naturally, team and associated parties’ wallets were excluded from all community distributions — please run the checks yourself to verify. As for the argument of sybil-ing by associated parties, they were never even made aware that a snapshot could be taken.