Gearbox DAO: Retroactive Public Contributions Funding & Jan Recap

Gearbox DAO: Retroactive Public Contributions Funding & Jan Recap

A fancy title to bait you! Jk, it’s real. This article is a recap of the 1st month of Gearbox Protocol life as well as Gearbox DAO coordination so far. Buckle up, there is a lot to go through. For example, unexpected rewards to the first active contributors — which is in the title as you could have guessed — as well as that Discord bot for the Genesis distribution finally going live.

Want some $GEAR? Get a piece of the protocol by contributing!

Gearbox Protocol Statistics

Before digging in, it would be good point out that the deployment is still test in prod with very low limits for TVL: $30K max borrow limit & only a handful of older assets available, see the AllowedList here. The DAO is working on improving this & opening the doors for new users… more on that below.

If you just want to see TVL numbers, which are still being suppressed, check DeFiLlama.

Despite the hardcore limits in place, this month has been a great avenue for testing the dApp, liquidations and figuring out features in prod. For example, here is an awesome analytical tool built by one of the contributors amantay, you can find him on Discord to shout out :) There is more!

The protocol has stayed overcollateralized and safe at all times, detecting no bad debt despite the super volatile markets. This is thanks to the limits in place being very safe, as well as some Credit Accounts being liquidated at a slight loss at the core contributors’ own expenses. Is that okay? - Yes, because it is caused by artificially suppressing TVL which creates small Credit Accounts where liquidation premiums don’t make up for gas costs (e.g. 5% of $1K USD doesn’t even pay for one Uniswap swap). In a real battle with sizable amounts, this would not be the case. Despite all this, there is already work on improving the liquidation flow which was discussed on Contributor Call #2.

Check out these presentations-visuals on DAO’s notion page, including info on what’s next:

The 4 pools — WBTC, DAI, USDC, ETH — have been semi-filled despite there having been no extra APY or tokens promised for this. It’s a DAO! In other conditions, it would not be hard to fill up to $20M even with expectations of retroactive airdrops, but this is now a DAO, so that’s not possible… right?

Anyway, the amounts currently available are totally acceptable for this test in prod stage, where users can still play around with the protocol. So

Nobody has decided to short WBTC, which was the best move probably in the last month. It could also be due to the fact that users generally don’t own WBTC to borrow from it even. This functionality will be fixed soon! See more in which are also being upgraded.

In terms of the Credit Accounts, it looks as follows — nobody wanted to short WBTC from the pico top! Users mostly took stables as leveraged borrowing, but didn’t profit that much from it. So far, it has all worked pretty well, and presented great feedback for future iterations.

Some liquidations have occurred, some other events were done by users — check them all out in the analytics tool:

Most of the capital seems to be leverage farming in Yearn now, showing that leverage farming passively is what users so far seem to make out of Gearbox — however, this can be an artificial metric given the restrictions on TVL & assets in place. Need to add, iterate, improve the product, and see what users actually do with thew product.

Speaking of the dApp, try it out —

Gearbox Protocol
Gearbox. Generalized protocol that allows to get leverage and use it across various DeFi protocols

Funnily enough, the treasury even earned something while it really wasn’t supposed to be yet. Mostly due to users aping out of pools and paying that 1% fee which actually should be reduced in the next couple months. See the DAO fee model.

Product next steps

The risk committee notion page has also been updated following a community forum discussion and assessment on the most desired protocols by the community, which took place here:

Signalling for Protocols to be Added
As we discussed on Community Calls (see the recap PDF here) - it’s time to choose what protocols should be added first. Details on some strategies could also be seen here: Technically speaking, possibilities are quite endless in a matter of weeks or months - after the oracle research expands its…

Currently, the work is ongoing on a few fronts, with Curve / Convex / Yearn leverage farming being available for farming in the next few weeks and pending DAO votes. The short-list also has Lido leveraged staking, as well as a few regular ERC20 assets being onboarded. Check the protocol list here.

Security is of utmost importance, whereas there are efforts to get Immunefi bug bounty up as well as initiate discussions with insurance protocols as suggested by DAO members. Next to that, there is yet another large audit scheduled to begin at the end of February, which is a developer deadline for the first suit of adapters to be built and then tested by the security researchers. That’s a deadline the devs are working towards.

Audits & Bug Bounty - Gearbox Protocol
Reports on Gearbox Protocol security.

You can see the ContributorCall#2 recap on the main notion page.

How to add new Contracts & Assets to AllowedList - Gearbox Protocol
Want to see your favorite protocol or asset be added to Gearbox Protocol? Here is what you need to know.

If there is a protocol you like, then get a developer (unless you are one yourself!) so they could build an adapter and have it be ready for the audit. This can get a grant too! Reach out on Discord with ideas-proposals.

DAO Coordination & Work

Retroactive public contributions funding

The Gearbox community has been absolutely awesome, DAO vibes to the max. So much was discussed and actually built! It’s super motivating to work together with everyone. Working members weren’t even sure if they would get something, there were no expectations…

Despite that, they shall be rewarded! The weights are subjective, but nobody would argue that these guys are super awesome and have dedicated weeks to gearbox already. Super based. Be among them ⚙️🧰

NOTE: where are the tokens coming from, if this wasn’t the DAO decision? This portion is derived from what was cut from botters in the Genesis ceremony, found by community members on the governance forum. Kilpatrick and Spadefish get what the forum says. As such, this portion was under initial distribution, and thus repurposed to more productive members. From now on, there are no discretionary decisions remaining, see the full token distribution here:

Contributors Going Forward

At this point, the work of the DAO is organized and documented via Notion where you can see the to-do list real-time and the research list of protocols, as well as all the other things. There are concrete tasks ranging from making documentation better, to creating a bi-weekly newsletter, to a bunch of dev tasks. Dive in, take ownership, take responsibility, and LFG!

In terms of the rewards, it is becoming more clear who prefers to be chatting & helping vs really doing the work and putting hours in. Both are fine and welcome, but they deserve a different level of compensation.

As such, the hands-on work can be split as follows:

  • The Thinkers. Contributors who love the protocol and commenting every now and then, bringing in good ideas and thoughts -> they can become delegates for the protocol, for which the DAO can incentivize them. Info on this should be open shortly, stay tuned! And suggest ideas too.
  • The Seasonals. Grants-based contributors: somebody taking a specific task and leading it from start to finish based on KPIs. This is similar to committee-approach but instead it’s even more agent-based. You want to integrate something and have the skills to? You want to do merch and have the time & connections? Put up ideas-protocols in Discord, have the DAO members comment, and take over that specific task!
  • The workers. Full-time contributors pulling night shifts working on the protocol. Those are put on a continuous by-monthly retainer/payroll and they do all the work they can! Truly dedicated members willing to stick for a long time. The rewards for this group can be discussed right now, seeing how a few members are aspiring to get in these ranks. You rock!

Discord Bot — Genesis

If you didn’t know of this before, just scroll through as it’s a thing of the past.

There was a Discord snapshot of active members before the launch in November, so now the bot is finally live to take your addresses! Very simple, just gib ur addy. The info was here if you want to know more:

Early Testers and Discord - Gearbox Protocol
Thanks to the early community, LFG!

What do, wen gib token, what bot?

This bot is just for Discord, testers distribution will be different.

  • Go to Gearbot#1468. He will be seen at the top of Discord in a separate role, next to Leverage Sensei. Don’t click on anything other than Gearbox! Check the username of the bot and its role in the server to confirm. Make sure to NOT get rugged by sending anyone your seed phrase. Again, it won’t ask you for absolutely anything except your wallet address.
  • In case you encounter issues, check your settings in case you don’t allow non-friends to message you. Apologies if that’s inconvenient, you can turn your settings back to normal after you go through. If nothing helps fix the issues, go to bug-reporting <- do not spam in other channels.
  • Such a drop won’t happen again, because now Gearbox is a DAO. Don’t try to spam or you will get banned. This is a retroactive thing of the past.

The contract for claiming will be up in a couple of weeks, so you have time to put yourself on the list. It will happen this way: a 1–2 week window now to submit your address, then the merkle is made. For late joiners, the bot will be up for submissions for a few weeks or so, and a new merkle will be made. After that, if you didn’t manage to chat with the bot and submit your address, you are just out, nobody will process anything after that.

A few more cool things that happened around the DAO

Back to work. Cheers!

If you want to contribute… then do it! Don’t ask for permissions. Lead discussions, bring interesting topics and research, and do with the work! LFG ⚙️🧰