Leverage Ninja: Gearbox Early V2 Access. A leverage-user teaser.
The journey is taking a new course… In the last series of Leverage Sensei’s memoirs, we learned about the coming of V2 and the next mysterious island we have to travel to. How did we do that? — It was all in the box Leverage Sensei left for us. There were quite a few messages hidden in there, which will take time to decipher, but today we will focus on the first one:
Leverage Ninjas: a group of new Gearbox heroes helping us reach V2 and unlock the new features. And YOU can be one of them!
Today, we shed light on Gearbox’s upcoming V2 that truly takes the idea closer to the potential we wanted to realize. A task so monumental, though, can not be completed without a force just as strong and that’s why our force… Leverage Ninjas. Our Ninjas, tasked with delivering a V2, also get to experience the advancements the V2 brings!
With V2, access in the first weeks will be restricted to Leverage Ninjas: a curated list of whales with a minimum $50K collateral who will be able to enjoy leveraged yields from Convex, Curve, Lido, and so on.
💡 Meanwhile, the LP side of passively providing liquidity Aave-style is open 24/7. You can already provide liquidity on the passive side and earn yield + retroactive GEAR. You can do so in Gearbox dApp. LM would likely be commencing soon with V2. This primer is however focused on the active side, giving a glimpse into what our Credit Accounts will soon be capable of.
In short, it’s a list of members who want to use V2 live on mainnet in a few weeks, with a minimum amount of 50K in collateral. They can enter or exit any position at any time. And the only requirement to become a Leverage Ninja, is to understand the protocol and submit your address [ping in Discord]. Easy? — Then let’s destroy bear market yields with Gearbox!
V2: what yield & how can Leverage Ninjas get it?
The following will be quite complex if you are new to Gearbox architecture or forgot about the technicalities. If that is the case, make sure to refresh your memory here and here. In terms of the flows, V2 isn’t much far from V1.
With V2 and the subsequent votes, the functionality of Gearbox will grow significantly compared to V1! To be exact, this is what can be expected to be up for voting, and if goes through, for leverage users soon after:
New Assets: enabling you to leverage trade in-and-out of CRV, CVX, FRAX, FXS, and so on. At the same time, you can also use these and more assets as collateral to increase your leverage (even for another asset).
New protocol integrations: experience your favorite protocols like Lido + Curve + Convex + Yearn with leveraged farming enabled!
You can make any leveraged position, be it long or short, farming stables or using portfolio margin, etc…
- Leveraged stablecoin farming (meaning you can take even x10 leverage);
- Leverage farming Lido stETH (meaning you can take even x10 leverage);
- Cross-collateral leveraged positions (get ETH-native yields while having debt in stables) and cross-collateral farming (use WBTC as your collateral yet farm with stables);
- Portfolio margining your bags (get leverage in stables while not selling your bags). You can also leverage trade, but alas, perps offer higher leverage than spot;
- In terms of pools on Curve, Convex, and Yearn: 3CRV, steCRV, sUSD, FRAX, GUSD, LUSD should be available. YOU decide how and where to get the yield! Gearbox just gives you leverage.
NOTE: keep in mind thought that Gearbox is not a structured finance protocol or a vault: nobody is managing your position on the Credit Account side or imposing any lockup periods. YOU DECIDE what pool to enter, how to enter, how to select your leverage, and so on. Basically, structured finance products can be built with the use of Gearbox’s leverage, but it’s not the core protocol job. End users, meaning you, have all the control.
A leverage-user guide, KNOW-HOW!
Below you can find brief info on what APYs you can earn, the risks, and how to become a Leverage Ninja. So how do you earn this 20% yield? — UST on Anch… Nono, we mean just follow the below steps.
The yields above are not fugazi, they were calculated from borrow<>deposit ratio currently on the market. Despite the yields having fallen across the board, they are still pretty juicy considering you don’t take risks on some options volatility selling, trading shitcoins, etc. The yields come from the usual LPing in Curve and Convex, as well as rewards for those pools (mostly in the form of CRV, LDO, and CVX). What you already love, but more!
Leveraged stablecoin farming // stable to stable brrr
Open a Credit Account with debt denominated in DAI, and borrow more DAI. Let’s say you put in $50,000 DAI and go x9 into a total $450,000 position. Then, throw that entire $450,000 DAI position into Curve → and then Curve LP tokens into Convex. Done! Brrr…Let’s recap again.
It’s nothing out of the ordinary, it’s fairly easy!
- Put in some DAI and then borrow a bunch more of DAI on leverage;
- Put all that DAI in Curve LP FRAX pool (or some other pool like LUSD);
- Put those Curve LP tokens into Convex;
- Bam, done, you are farming with composable leverage 🥷
Leveraged Lido stETH // leveraged staking -> Convex
The same goes for stETH: take x5 leverage only, and you can weather even a drop below 0.90 stETH/ETH. Historically speaking, Chainlink oracles have never reported such a drastic drop, so you would be fairly safe from liquidations. And if it goes south, you can unwrap a part of your position any time, or add collateral.
Let’s recap again. It’s nothing too out of the ordinary, it’s fairly easy!
- Put in some ETH and then borrow a bunch more of ETH on leverage;
- Stake all that ETH in Lido or just buy stETH with leverage;
- Put that stETH in Curve LP pool;
- Put those Curve LP tokens into Convex;
- Bam, done, you are farming with composable leverage 🥷
More complex strategies for farming // portfolio margin
- Open a Credit Account with debt denominated in DAI;
- Put in your WBTC as collateral, increasing your Health Factor and as a result, your borrowing power;
- Borrow a bunch of DAI;
- Go farm with that DAI in Curve’s FRAX pool or somewhere else;
- Put those Curve LP tokens into Convex;
- Bam, done, you are farming with composable leverage 🥷 And even more so, your exposure to BTC is still in tact. So you kept your productive collateral while getting stablecoin delta-neutral yields!
Increase your position size and continue doing what you love! If you used any of the above protocols before, the experience should be very easy and known to you.
🎮 But if this stuff seems a bit too complex for some… yet you still wan’t to play with leverage and get juicy APYs, you will also be able to just use a couple of buttons and reduce the headache of entering a position manually! Thanks to multicall which bundles a few transactions into one, TBA…
So, how to become a Leverage Ninja?
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:
