- Gearbox has been live for over a year, making leveraging possible without KYC or trust
- V2 of Gearbox will integrate with Curve, Lido and Convex
Gearbox, an on-chain composable leverage protocol that has been around for over a year, has raised a $4 million DAO round from investors at Placeholder, Zee Prime, Ledger Prime, Polymorphic and GCR.
The protocol first came to life over a year ago at the ETHGlobal hackathon in February 2021, Ivan Ngmi, pseudonymous Gearbox DAO contributor told Blockworks in an interview. But since December 2021, the Gearbox protocol has been governed by the Gearbox DAO that currently comprises about 8,160 GEAR token holders.
“Gearbox V1 has been fully deployed on-chain for more than half a year now,” Ngmi said. “The core innovation is that our credit accounts give every user a leveraged smart contract ‘wallet’ which they can connect to other third-party protocols and compose their positions there.”
Borrowers can earn leverage through assets by depositing approved collateral and then using it across various protocols through margin trading, leverage farming, leverage options and many more, Ngmi said.
‘It essentially allows lenders to take leverage without having to have a credit score trust or permission system,” Ngmi said.
The latest funding will help Gearbox launch V2 of its composable leverage product, which will introduce new assets including CVX, FXS and CRV.
V2 will also integrate with existing DeFi protocols including Lido, Curve, Convex and Yearn. The latest version will allow users to employ ten times leverage on yield farms via third-party protocols with stablecoins including Frax, LUSD and sUSD.
Leveraged farming positions in ETH and stETH can also be taken after V2’s launch, whether to farm yield or arbitrage the ETH/stETH ratio.
“We believe that composability is a key feature in DeFi [decentralized finance]. While other products might be better at providing simple leverage for going long or short, the emphasis of Gearbox Protocol is on composability with other DeFi protocols,” pseudonymous 0xMikko, a core developer at Gearbox, said in a statement.
“As we already see a dire need for leverage without any trust or credit scores — credit accounts as primitive make leverage for anything possible fully on-chain, only relying on math and code,” he said.
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