Gearbox DAO Update: February 2023
Before we begin, let us let you know that this DAO Update is not like the ones before it. While it may read in a similar manner and have all the DAO news like you are used to, it marks the beginning of another pivotal moment for the DAO. In a way, this DAO update is the beginning note of a farewell. A farewell that appreciates what it parts with as it gears up for new things to start the next leg of the journey for Gearbox. A new journey that takes the protocol closer to what it is capable of achieving… And it all begins NEXT WEEK.
Anndddd back to the DAO update to cover all that went down through the month of February. Shortest month of the year felt even shorter as the DAO paced through tasks, proposals, improvements and more. So go ahead and read on to capture all the major things that happened in Feb in 1 go.
You can read our previous updates on our medium or check the DAO work on our notion.
1. Leveraged LSDs: Now on Gearbox!
Over the last few months, we have heard about how Liquid Staking Derivatives are likely to see a massive boost post Shanghai Update. Majority of that comes from the fact that while ETH staking yields are some of the best yields in DeFi, inability to withdraw ETH from Beacon means staking might not be too efficient. LSDs effectively solve this by enabling liquidity even while the ETH is staked. When you stake ETH through an LSD protocol, you receive a “receipt” token or a token that denotes the ETH amount you stake. Thus, enabling liquidity.
With LLSD Gearbox becomes the first protocol on DeFi to natively enable up to 10x leverage on LSD protocols. This doesn’t change any of the mechanisms in which deployment and receipt tokens work. LLSDs only lend you more ETH to stake thus enabling leverage on the best source of yield in DeFi.
Currently there are 4 major players in LSD: Lido, cbETH, Rocket Pool and Frax. Due to oracles not being available, Gearbox has only been able to add cbETH and Lido based strategies to the AllowedList. These two together form 90%+ of the LLSD market share, putting Gearbox in a great spot to capture the TVL as Shanghai goes live.
2. OBRA model and first 2 initiatives LIVE!
In one of the most significant changes for the DAO operations, the DAO moved to OBRA model. The OBRA model brings to Gearbox an expansive, asynchronous and more decentralised model of working.
This is made possible through the initiatives and sub-DAO model. With these, you can effectively propose to the DAO a grant that you’d utilise to deliver something of strategic importance. At the end of the period, DAO can evaluate the quality and usefulness and choose to either let go of the initiative or keep funding it. You can read the tweet below for more details.
The model also proposed a multiplier based system for $GEAR payouts to the contributors. It has 2 key parts. First is a longer term vesting based new incentive structure for contributors who commit another year to the DAO. If contributors commit to this but don’t complete the year, they lose 75% of the tokens they would get otherwise. Second, if the contributors are already unsure of or don’t want to commit another year, they can continue with the current method and no multiplier. You can read all of this below in GIP-43:
The first two initiatives proposed also cleared. You can read more about them below
3. New Collateral and Strategies 🔥
Amongst the cohort of votes for last month were also the votes on two key new additions, MiM and cbETH. While a new pool for FRAX was deployed with $GEAR rewards going live as well.
As per GIP-46, cbETH was added to the AllowedList. This is a crucial step to grow the LLSD cohort for Gearbox and the DAO approved the same. cbETH at the moment is a $1.8B staking market and thus vital for the protocols expansion into LLSDs.
NOTE: cbETH and MIM strategies have only been added to the AllowedList post approval. They have not yet been deployed on the protocol. An update will follow as and when they are added.
The second AllowedList sided asset addition was MiM and it’s Curve as well as Convex pools. The DAO since launch has seen great success with stablecoin farming. sUSD pool has been the highest TVL pool for 7 weeks in a row, the one before that was the LUSD pool. In an effort to expand our stablecoin cohort as well as to be able to offer higher yields to our Ninjas, MIM addition was proposed. The same cleared with GIP-47 clearing.
While this is on the demand side, the supply side saw a significant addition too. The FRAX pool, which was approved in GIP 29, was finally added alongside the GEAR rewards. The expected APY at 5M value is over 7%, you can LP here: https://app.gearbox.fi/pools/
4. Balancer to supply to Lending Pools 🔥🔥
While Gearbox leverage has been the centre of attention, the lending side offers value that is just as crucial. With high rates, sustained through organic utilisation and borrowing where the borrower never even custodies the funds, Gearbox Lending Markets offer a great deal in a relatively safer manner.
The chads at balancer recently took note of the same and have since deployed a gauge called ”bb-g-USD gauge” for the Gearbox USDC and DAI passive lending pools.
This effectively utilises the idle LP value with balancer and turns them productive by deploying it to Gearbox Lends pools. You can read the complete details below.
5. What is… Codename? 👀
Ah we won’t talk too much about it… This week. The whole of next week will be dedicated to *Codename* and our way forward. 👀
6. Financial Update
As of end of December, the DAO treasury holds $5.03M in its address and an additional 4.57B GEAR Tokens. The realised revenue for the month of January was 27k while spends were at 0k. Contributors are to be sent $66k and earned a further ±8.8 million tokens over the month of work(vested basis multiplier models, either 1 Year or 2.5 Years).
For GEAR outflows, 21M were deployed as a part of the LM programs.
This puts the DAO in a healthy financial place with a runway of over 2 years even after factoring in growth.
Other Highlights
The above were the key events that occurred over the month, there were still some noteable but smoller developments that deserve a look at:
a. Vote to expand liquidity to balancer
The DAO rejected GIP 39 to deploy treasury funds to create a pool in Balancer as well
b. Gearbox Social Coordination
Just a fun activity to get the DeFi protocols together and show unity.
c. Lending Market safety and insurance call with Nexus Mutual
d. Yearn Deploying Vault for GEAR/ETH Curve Factory pool
And that’s all for the DAO update bosses. 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:
