Gearbox DAO

FORUM: https://gov.gearbox.fi/t/gip-1-proposal-to-add-pools/347

This proposal was drafted as a result of a previous discussion and made with help of 0xn1ck, ov3rkoalafied, alnash, and ilgiz. I am taking the liberty to turn it into a snapshot vote. The parameters have been discussed and can be learnt about via the docs links.

List of pools to add at the initial stage

These are fairly standard pools that have the most liquidity and are most commonly used in DeFi protocols.

• WETH - 0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2 1
• WBTC - 0x2260fac5e5542a773aa44fbcfedf7c193bc2c599 1
• USDC - 0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48 1
• DAI - 0x6b175474e89094c44da98b954eedeac495271d0f

Pool Caps

At the start, it is worth limiting the amount of capital at $3M per pool. The problem that arises here is the risks of liquidity crisis if one whale takes out a large loan to his Credit Account. To avoid it I suggest limiting the max borrow amount per Credit Account to approximately $40k . This means that around 75 Credit Accounts will be created per pool if maxed out, and 280 in total over 4 pools. Seems that this is enough diversification so that the system is not so turbulent at the start.

Other pool and credit manager parameters

• Max leverage = 4. More aggressive leverage can increase the risks of the protocol at the start, while 4 looks like sufficient leverage for financial transactions.
• Withdrawal fee 1%. This withdrawal fee can be considered as a backstop against system turbulence in the first weeks post-launch. This is only temporary and should be lifted in a few weeks. If you stay in the LP pool and the withdrawal fee is then not going to affect you.
• APY spread is 10%
• Fee liquidation is 2% (going to Protocol Treasury)
• Liquidation discount 5% (going to a liquidator)
• Default Swap protocol: Uni V2
• Chi Threshold 0.995
• Fast Check Interval 4

You can discuss here: https://gov.gearbox.fi/t/gip-1-proposal-to-add-pools/347. If you vote “no” and reject this proposal, please elaborate on the forum and suggest another set of signers.