Gearbox (GEAR)

Leverage and Trading

Gearbox allows users to borrow assets and create leveraged positions that can be used across many DeFi platforms. This includes margin trading on Uniswap, farming on Curve and Balancer, and leverage staking on Lido. Users can use up to 10x leverage to increase their capital efficiency.

Lending and Yield

Passive users can lend their assets to Gearbox pools to earn passive yields. These lenders provide liquidity that active users borrow for leveraged trading and farming.

Composability and Integration

Gearbox acts as a backend leverage protocol that other DeFi projects can integrate easily. Developers can add a “take leverage with Gearbox” button to their platforms, allowing users to access leverage without interacting directly with Gearbox.

Credit Accounts

Gearbox uses isolated smart contracts called Credit Accounts to manage borrowed funds and collateral safely. These accounts allow flexible and composable leverage use while maintaining security through liquidation mechanisms.

Governance

The GEAR token is used for governance, letting holders vote on protocol parameters, supported assets, and fee structures, helping the protocol evolve with community input.

Use Cases Summary

• Margin trading on decentralized exchanges
• Leveraged yield farming
• Leveraged staking and restaking
• Building DeFi apps with integrated leverage
• Earning passive income by lending assets

Pros

• Gearbox offers composable leverage, allowing users to take leverage in one place and use it across many DeFi protocols like Uniswap, Curve, and Lido.
• It supports up to 10x leverage, enabling more capital efficiency for traders and farmers.
• The protocol is non-custodial, so users always control their funds.
• It has a modular smart contract architecture that supports complex strategies and integrations.
• Gearbox provides passive yield opportunities for lenders through single-sided asset lending.
• The protocol is governed by a DAO, making it community-driven and adaptive.
• It has undergone multiple security audits by reputable firms.
• Gearbox maintains a consistent total value locked (TVL) even during market downturns, showing resilience.
• It integrates with popular DeFi platforms, enabling diverse strategies like leveraged trading, farming, and staking.

Cons

• Gearbox has not yet gained significant traction or widespread adoption.
• Users may need additional trading platforms or smart contract logic on top of Gearbox to fully utilize margin trading.
• The token price has experienced notable declines recently, underperforming the broader crypto market.
• The system’s complexity might require users to have some DeFi knowledge to use it effectively.
• As a newer protocol, it may face competition and challenges in scaling its user base.

Founders of Gearbox

Gearbox was co-founded by a team of experienced blockchain developers and entrepreneurs, including Alexey Arestov, who has a background in software engineering and DeFi development, and Andrey Pritula, who has expertise in product management and crypto markets. Another key founder mentioned is Ivan GBI, with Ilgiz Gimaltdinov serving as FounderCTO.

Additional Context

• Gearbox Protocol was founded in 2021 and is headquartered in the British Virgin Islands.
• The project focuses on decentralized finance (DeFi) leverage solutions.
• The founders have combined expertise in blockchain technology, software engineering, and crypto markets to build the platform.

Investors in Gearbox

Gearbox has raised a total of $4 million from a group of investors. Some of the known investors include 1kx, A.Capital Ventures, Cyber.Fund, eGirl Capital, Fisher 8 Capital, Placeholder Capital, Variant Fund, and Zee Prime Capital. Additionally, individual investors such as Cobie, Darren Lau, Daryl Lau, and Larry Cermak have also invested in Gearbox. Overall, there are 14 investors involved in funding the project.

Halal Status of Gearbox

• No: Gearbox is a DeFi protocol that offers leveraged lending and borrowing services. According to Islamic finance principles, earning yield from lending platforms where capital is lent out and interest-like rewards are generated is generally considered haram because it resembles riba (interest).
• Reason: Gearbox’s model involves borrowing and lending with leverage, which is similar to interest-based transactions that are not compliant with Shariah law. Therefore, Gearbox is not considered halal.