Leveraged Curve V2: Farm 5x of your funds 🤯
For the past two years, farmers have been making the usual bear market APYs. Inflation meanwhile has gaped our a**holes like that train entering a tunnel GIF, IYKYK. But no more, Gearbox’s new integrations are about hit these bears like a MFKA.
MFKA… Make Farming Kool Again
And with 20%+ APYs natively on Curve and Convex on the table even today, we are all about to become… MFKArs.
NOTE: Gearbox is currently in “Ninja” mode, where you have to request access in order to open a position. This was done to ensure the safety of the protocol. While this will change soon, you can submit your addy for access either on discord or our forum. It is very easy, don’t worry!
The no marketing Mumbo Jumbo TLDR
For those who don’t want to go through the risks, details etc. - here is a short overview. Others can skip this part and go to the detailed article itself. Gearbox will be adding 4 new Curve V2 strategies:
- Tricypto: ETH, WBTC and USDT pool on Curve and Convex
- LDO/ETH pool on Curve and Convex
- CVX/ETH pool on Curve and Convex
- TriCRV: CRV + crvUSD + ETH pool on Curve and Convex
UPDATE: The TriCRV pool was added on October 12th after GIP-75 successfully passed.
And these are capable of generating as much as… 100%+ APYs
What to expect: The maximum borrow limit for an individual address for will be $1M. The maximum exposure towards a strategy for Gearbox will be $5M. Once $5M worth of assets are held on CAs, no further increase in size will be possible. Initially, it’ll only be possible to borrow ETH to gain leverage. Min borrow to open an account will be 60 ETH.
How does it work: The above APYs are earned natively through Curve/Convex pools, Gearbox only enables you to lever up your assets which are then LPed to Curve/Convex. You can get access to open a position by submitting your address anonymously on the gov forum or pinging us on Discord.
Audits and Risk: The contracts have been audited by ChainSecurity, who audited Curve Finance’s Tricrypto pool as well. Meanwhile, risk framework and LTV development has been done in conjunction with Risk DAO who have worked with AAVE, Liquity, Maker and more to help avoid bad debt.
NOTE: Given these pools are more volatile, leverage over 4X should be taken with caution. Ensuring your HF remains in a healthy zone (over 1.1) is key to making the most of above strategies. To understand Composable Leverage and how to use it in detail, read our leverage bible.
Now, on to the longer explanation and details of these additions…
How does Gearbox enable native leverage on Curve and Convex?
Gearbox is able to achieve this through Composable Leverage.
Composable leverage enables you to use your leveraged position across DeFi protocols to stake, farm and earn APYs on. This is made possible by enabling users to borrow multiples of their collateral and holding these funds in an isolated smart contract wallet called Credit Accounts(CAs). Since the leverage is created with real assets, it’s possible to use the position across other DeFi protocols like Curve and Convex.
PSA: The assets that are borrowed to create the leveraged position come from Gearbox Lending pools. If you aren’t a leverage taker, you can always choose to earn passively through the lending pools. Lend here: https://app.gearbox.fi/pools/
The pools that’ll Make Farming Kool Again
With GIP-63, 67 and 72 voted on, the DAO has now allowed addition of 5 new Curve pools and their convex counterparts. All pools will have a max $1M borrow limit and a $5M max quota limit. The quota limits determine the maximum exposure Gearbox will have to the pools, this is done to reduce risk of bad debt. Meanwhile, to open an account, there’s a minimum borrow limit in place of $60K/30ETH. This has been reduced from 150K/75ETH with the passing of GIP-71.
The DAO later has also approved GIP-75, leading to the addition of TriCRV pool for Curve and Convex. The parameters remain the same as the ones mentioned above.
NOTE: These pools will be in addition to the existing Curve pools added last year with the launch of Gearbox V2, you can read the details in the article below
1. Tricrypto2 Pool
The tricrypto2 pool comprises of USDT, WBTC and ETH. It’s often used as a sort of index for the two crypto majors when depositing USDT. With Gearbox, you can lever up ETH and deposit into the pool to access leverage.
The max leverage available for the pool will be 8.33X. The pool currently yields 5.13% organically at a TVL of $72M. With leverage, the max APY possible on the pool will be closer to 17.8% APY depending on the ETH borrow rate.
2–3. CVX/ETH and LDO/ETH
CVX/ETH and LDO/ETH are factory pools with just 2 assets each. Since you lever up ETH and then deposit into the pools, you are effectively gaining leveraged exposure to CVX/LDO itself.
- For the CVX/ETH pool, the max leverage available will be 5.55X. The pool currently yields 8.3% APY at a $16M TVL but with leverage the max APY rises to 30.9%.
- For the LDO/ETH pool, the max leverage available will be 5.55X. The pool currently yields 19.7% APY at a $6.4M TVL but with leverage the max APY rises to 95.2%.
Since CVX and LDO are more volatile assets, it’ll be important to exercise better risk management while farming than other non-volatile pools. The features that’ll help you manage this is a CA are detailed in our docs, here.
4. TriCRV Pool
The TriCRV pool is a new pool that’s gained a lot of traction in DeFi, as indicated by it’s $19M TVL. The pool consists of CRV, ETH and the new stablecoin crvUSD. TriCRV at a 5X leverage will be able to produce a net 123%+ APY.
The maximum leverage available for TriCRV is 5.55X and the pool’s made available for both Curve and Convex.
Outdated: TriCRV pool’s adapter has been approved for the use of swaps only at the moment. This was done to facilitate the swap of CRV rewards for CA users. The LP token is added too but the LTV is set at 0 leading to no borrowing against it. This could change with a future GIP and DAO’s approval on it to change the LTV.
But what are the monies…?
Let us make life easy for you anon. At a 5x leverage, you can make as much as 123% APY on the TriCRV pool, 28% APY on the CVXETH pool and 86% APY on the LDOETH pool. 🤯🤯🤯
While the APYs look amazing, they can vary and of course, carry risks. There are the obvious market risks related to the volatility of CVX, CRV and LDO that can lead to losses and thus leverage should be used with caution. For other kind of risks, you can always refer to risk.gearbox.foundation.
How to open a position
Now that you are ready to be a MFKAr, let us quickly show you how you can open a leveraged farming position on Gearbox. This is with the assumption that you have already submitted your addy to be a ninja either on the gov forum or through Discord.
- Go to https://app.gearbox.fi/accounts and click on choose strategy!
2. Choose the position you want to open and click on “One Click Ape In”
3. Choose the leverage you want to take by moving the slider, approve the token you want to open your account in and then click on “Open Position”
And voila! Multicall will take care of the rest. Within one transaction your CA will be opened, required swaps will take place, your leveraged LP will happen and you will receive your LP tokens on your CA.
Easy, one click crypto UX brought to you by the Gearbox Devs.
What next? You are all set but risk management is still necessary, make sure you take care of the health factor for your position and don’t get liquidated. Our docs will show you how to use functions within a Credit Account manager. Click here to read that or to go deeper into understanding Gearbox Leverage, read the Leverage Bible.
Gearbox’s Security Practices
We are aware of how important it is to ensure the safety of the contracts your funds interact with and we take it very seriously. Of every 1$ Gearbox spends, 45 cents go towards the security and risk function. But you can read about our security practices in the thread below to see how we ensure security of contracts.
Audit and Risk Evaluation
Further, Curve V2 addition contracts have been auditted by ChainSecurity who have audited the Curve Finance’s own Tricrypto pool security as well. This is along with audit’s of MakerDAO’s liquidation system and more. It’s only after rigorous testing of the code that the integration has been finalised.
Alongside this, Risk DAO has thoroughly evaluated risk parameters in terms of DEX liquidity, performance of pools through extreme volatility, performance at different LTVs and more before helping finalise the LTVs and risk parameters for the required pools.
Risk DAO has worked with Liquity, AAVE, Maker and more to ensure safety of their lending markets.
BUT… “Don’t Trust, Verify”. Even our security
You don’t need to trust what we have deployed. Gearbox Risk Foundation enables you to make sure that the deployed contracts are the same as the ones audited. Learn how to check this in the thread below.
Or learn more about Gearbox Risk Foundation and how it can help you trustlessly verify Geabox’s risks and security through the article below.
So go ahead, verify and have a great time using Gearbox. With all the development, it’s our sincere effort to bring you a safe and useful source of yield. Whether you are a passive lender or a farmer looking to make farming kool again, Gearbox is for all.
And again, if you want to access the Curve V2 pools mentioned above, drop in in our Discord or post your addy on the gov forum to gain access. If you would like to join the DAO — 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/
- Risk Documentation: risk.gearbox.foundation
- 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:
