Gearbox DAO

Author:

DAObox Inc.

Summary:

This proposal seeks to extend DAObox’s mandate as director and supervisor of the Gearbox Foundation (the “Foundation”) for an additional two-year term. Over the past two years, DAObox has successfully managed the Foundation’s day-to-day operations, implemented governance resolutions, and established required legal frameworks — all aimed at upholding the DAO’s long-term sustainability and advancing its decentralisation.

The renewal proposal includes an adjustment to the annual management fee, increasing it to 69,375 USDC per annum, payable upfront for two years. This reflects the expanded scope of responsibilities, growing operational complexity, and higher demands associated with managing the Gearbox Foundation, and includes a 7.5% discount extended by DAObox. This renewal does not include any additional allocation of GEAR tokens.

Motivation

Background & Stats In December 2022, GEAR DAO decided to establish a DAO legal wrapper in the form of a Cayman Islands foundation. As per GIP-34, the GEAR DAO engaged DAObox to design and establish the Gearbox Foundation and to serve as its director and supervisor during the period of 2 years.

Since late 2022, acting in this capacity, DAObox has consistently delivered on all objectives outlined in GIP-34 and subsequent proposals relating to the Foundation.

Here are some key statistics from this period:

• 360+ transactions processed
• 20+ strategic initiatives completed
• $1.59 million in transaction volume (fiat and digital assets)
• $903k in grants received (GEAR DAO, Optimism and Arbitrum)
• 750+ hours of work by the Foundation team (DAObox)

Foundation Workstreams The Gearbox Foundation’s purpose is, among other things, to promote, support, and facilitate the growth and development of the Gearbox blockchain protocol. Within the stated purposes, the Foundation actively supports various DAO contributors in their initiatives and project efforts, handles the execution of certain transactions approved by the DAO, and takes responsibility for performing specific DAO governance resolutions. The Foundation remains open to taking on additional responsibilities as requested by GEAR DAO, aligning with the ongoing growth and development of the Gearbox protocol and community.

Below is a list of the Gearbox Foundation’s current projects and areas of responsibility:

• Intellectual Property: Acquired major IP rights related to the Gearbox protocol during the initial term. Continues to accumulate, hold, and protect IP on an ongoing basis.
• Infrastructure: Facilitates technical infrastructure required for the Foundation’s objectives, including third-party platforms and providers.
• Contributors: Engages and manages the Foundation’s contributors and service providers. Handles onboarding, invoicing, payments, and paperwork. Coordinates efforts between DAO contributors and the Foundation.
• Payments: In addition to a number of blockchain multi-signature wallets, established multiple payment accounts and crypto-to-fiat off-ramps. Foundation maintains backup payment methods to ensure uninterrupted operations.
• Grants: Applies for and receives grants on behalf of GEAR DAO. Completed grant procedures with Optimism and Arbitrum in 2024.
• Legal Agreements and Paperwork: Reviews, negotiates, and signs legal agreements with counterparties and vendors. Processes relevant documentation and maintains records.
• Coordination: Provides general coordination of efforts involving the Foundation, DAO contributors, and ecosystem actors.
• Compliance: This area encompasses organisational and technical measures to ensure adherence to applicable regulations. Recent developments include the implementation of the Crystal KYT solution.
• Risk Assessment: Conducts ongoing risk assessments to ensure security and stability of the Foundation, adopts relevant organisational and technical means.
• Legal Support Administration: Engages Aurum for legal assignments and associated services when necessary. One example is the Gearbox GitHub IP contribution framework (see more here ).
• Corporate Services: Manages corporate services and actions, including annual renewals, compliance filings, economic substance compliance, and liaison with registered agents.
• Accounting and Financials: Handles accounting and related activities, including financial records, statements, budgeting, and regulatory compliance.
• Reporting to the DAO: As the Foundation director, DAObox reports to GEAR DAO on operations at least twice a year, providing updates on major assignments, projects, and statements of financial position, and facilitating transparency with regard to the legal wrapper.

To learn more about the role of the Gearbox Foundation within the GEAR DAO ecosystem, and to better understand DAObox’s position as its acting director, please refer to our reports available on the DAO Discord forum here.

Rationale for Fee Adjustment Like traditional organisations, DAOs evolve in response to growing operational needs, regulatory changes, and community-driven goals. The growth of the Gearbox Foundation and the increasing complexity and volume of responsibilities have led to a significant rise in transactions, administrative oversight, strategic planning, and day-to-day management. The proposed fee adjustment ensures high-quality services amid the growing complexity of the DAO’s operations and structure, as well as supporting the growth and expansion of the GEAR DAO and community overall.

The proposed fee adjustment of 75,000 USDC per annum, or 6,250 USDC per month, reflects DAObox’s current base market rate. In recognition of our longstanding relationship with the GEAR DAO and our valued cooperation, DAObox is pleased to extend an additional 7.5% discount on our standard baseline pricing, bringing the total cost of the two-year contract to 138,750 USDC.

Should GEAR DAO decide to establish a second legal wrapper in the form of a DAO LLC, as presented in a separate proposal by the Foundation, DAObox will not increase its fees in connection with its role in this second wrapper.

DAO Resolution

The renewal of DAObox’s engagement is proposed on the following terms:

• Contract Duration: A two-year engagement period, with an option for further extension, commencing upon the conclusion of the current term.
• Compensation:
  • Annual Fee: 75,000 USDC, with a 7.5% discount reducing it to 69,375 USDC.
  • Payment: Two-year upfront payment totaling 138,750 USDC.
• Scope: DAObox will continue acting as the director and supervisor of the Gearbox Foundation throughout the extended term. Our responsibilities will remain substantially the same, covering essential operations and oversight in the GEAR DAO legal wrappers, supporting their goals and governance processes.

By adopting this resolution, the GEAR DAO ratifies and authorises the renewal of DAObox’s engagement under the outlined terms. If this proposal is approved, the DAO will be kindly requested to promptly settle the above fees according to instructions, to be notified to the DAO or relevant contributors by DAObox.