Leveraged Farming

Gearbox is a generalized leverage protocol that allows anyone to access DeFi-native leverage and use it across various third-party protocols.

Risk Rating
Protocol Code Quality
Protocol Maturity
Protocol Design
What we like
Gearbox offers users ready-made, one-click strategies to easily lever up on core DeFi positions. The protocol is also managed as a DAO with strong multisig setups.
What we like less
User accounts may be undercollateralized if there are untimely liquidations. Gearbox covers this loss from its reserve but is limited by the valuation of LP tokens owned by the DAO treasury.
What it means for you
Offers you a backend composable leverage protocol that can be used across DeFi. The front-end interface provides you easy access to leveraged DeFi positions.
  • Website
  • Token: GEAR
  • Tags: Leveraged Farming
Key Metrics
  • TVL: $3.1M (Rank #155)
  • TVL Ranking by Leveraged Farming: #0
  • Blockchain: Ethereum
  • Chain TVL
    • Ethereum: $3.08M
Risk Assessment
Protocol Code Quality
  • Code reviewed by several experienced auditors including ChainSecurity, ConsenSys, and Sigma Prime
  • Anonymous team reduces transparency
  • No documented protocol hacks since launch
  • Robust controls to mitigate oracle price manipulation
Protocol Maturity
  • Core protocol launched in 2021; maturity over a year reduces technical risk as smart contracts are moderately battle-tested
  • Top 10% by total value locked reduces risk
  • Decentralized governance increases transparency
Protocol Design
  • No concerns identified
  • Isolated markets enable asset risks to be contained to each individual pool without impacting the entire protocol
Things to know about Gearbox

How Gearbox works

Gearbox has two core uses on its platform: lenders and borrowers. Lenders or liquidity providers (LPs) are users who seek passive yield and have a low-risk appetite. LPs on Gearbox operate similarly to Compound as providing liquidity return cTokens to the user. With Gearbox, users get back dTokens, or Diesel tokens, which automatically accrue interest and fees. Borrowers are traders who have a higher risk appetite and want to leverage their positions by borrowing liquidity from Gearbox. Borrowers and lenders are bound together by credit accounts. A credit account is an isolated smart contract containing both the user and borrowed funds, has liquidation thresholds, and has an allowed list of tokens and protocols. Funds on credit accounts are used as collateral to take on debt. Users can operate these funds by sending transactions to their credit accounts. All trades and operations occur through third-party platforms like Uniswap or Curve.

How Gearbox makes money

Gearbox takes fees for different operations. If a credit account is liquidated, a 4% fee is distributed to a third-party liquidator and 1.5% fee goes to the protocol. The protocol also takes a spread fee between the APY that LPs receive and the fee that farmers pay for borrowing their assets. All protocol fees are controlled by governance with nothing reserved for core contributors or the foundation.

How you make money on Gearbox

You can supply assets into Gearbox to earn interest payments paid by borrowers. You can also utilize the platform's one-click strategies to leverage core DeFi positions like staking ETH, stablecoin farming, and Yearn vaults, among others.

Gearbox Pools