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Gearbox V3 is about to launch, and here's a quick look at the details of the upgrade

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What does Gearbox V3 actually accomplish? What new features or features to look forward to?

Original title: Can Gearbox V3 Reinvent Leverage and Lending?

Original article by Karen, Foresight News

What does Gearbox V3 accomplish when the Gearbox Protocol teaser V3 version upgrade details this week and sees the new version as the DeFi leverage base layer that redefines leverage and borrowing? What new features or features to look forward to?

LP credit: Only stay in the mainstream blue chip pool or transfer dTokens to the Alpha pool

Built on V2 performance and code base, V3 can not only add less liquid pools, tokens, and protocols, but also modularize these pools to provide additional options for users without dispersing liquidity.

In other words, lenders continue to provide liquidity in the current very conservative mainstream blue chip lending pool and earn dTokens, or they can choose to deposit these main pool dTokens in the higher risk Alpha pool to earn more APY, but with more risk.

Additional Alpha pools will integrate more DeFi and NFT protocols, but the integration of such pools will still set relatively conservative LTV (loan-to-value) and strict clearing rules. The APY received by the lender consists of the base APY of the mainstream blue chip pool plus the base APY of the Alpha pool and an additional fee collected from the quotas. In addition to Alpha, other modular pools may follow.

Second, through the risk exposure ceiling and quota customization to mitigate borrowing risks

Gearbox V3 will allow the introduction of overall risk exposure caps (recommended and governed by the risk board) for assets on the whitelist list, and each whitelist asset will have a threshold (denominated in the corresponding lending pool underlying asset), i.e., The total exposure to the asset (quota quota) of all credit accounts borrowing from the pool must not exceed this limit.

The actual amount of assets used as collateral for a particular CA is determined by a quota, which is also valued in terms of the underlying asset. Each borrower can set any quota value they want for each mid-tail asset. The larger the quota, the higher the interest payment.

If the value of the user's actual assets in the pool exceeds the quota, the excess will not be counted, and if it is less than the quota, the actual value will be considered exposure. The sum of all quotas will not exceed the overall exposure limit.

Gearbox says this mechanism can add illiquid assets like long tail and mid-tail assets, as well as other protocols or asset classes, without increasing protocol risk, while ensuring liquidity availability and eliminating bad debt issues. It also makes deployment across chains or on Layer2 possible, says Gearbox. You don't have to worry about Layer2 being too illiquid.

3. Introduce quota interest and reshape Token economics

V3 also introduces a new type of interest derived from quotas, with borrowers paying extra interest related to the quota of each asset rather than the actual amount borrowed. This quota interest will be paid to the Alpha pool, that is, the interest received by the Alpha pool consists of: mainstream blue chip pool base APY+ Alpha APY+ quota interest. The DAO will then collect an interest fee.

The quota APR consists of two parts, one is the minimum risk premium paid to LP based on the exposure risk, which is set by the risk committee, and the APR shall not be lower than this value; The other part above the minimum risk premium is divided between leveraged borrowers (Ninjas) and LP. The maximum APR is estimated by the Economics Committee, and both values are regularly revised.

Ninjas 和 LP 之间的分成平衡就成了非常值得关注和谨慎的问题，具体分成比例将由 GEAR Token 持有者链上投票决定，GEAR 持有者投票 LP bucket 或者 Ninjas bucket，每个 bucket 中 GEAR 的比例决定实际 APR 值。

为了避免漏洞利用和防止 flash-voting 将资金快速偏向某中 Token 或资金池，GEAR Token 持有者投票锁定的 Token ，可能会有 1 至 4 周的解质押期。每 epoch 开始都会举行一次投票，不更改选择的投票会自动滚动到下一个 epoch。Stakers 也可能会共享一部分额外收入。

In addition, V3 adds Gearbot, an automated contract that allows credit account owners to delegate some management of their active accounts to third parties for automated portfolio management activities such as stop-loss, stop-gain, automated health index maintenance, and automated measurement management. In addition, it will become easier to create funds on an automated management chain without depositors having to hold their money in trust with a third party.

summary

Gearbox V3 release, which is expected by the end of Q2, not only creates additional Alpha Pool revenue opportunities for master pool lenders, but also adds more mid-tail and long-tail assets and a variety of DeFi and NFT protocols, Gearbox ensures sufficient available liquidity on the chain and mitigates borrowing risks to a certain extent by setting the risk exposure ceiling and quota of whitelist assets through its self-defined innovation mechanism, and hopefully helps Ethereum and other public chain/network ecosystems with low liquidity to provide more secure and more liquidity available leverage and loan combinable functions. This leads to more composability and possibilities.