Authors

apeir99n, mugglesect, desnake

Summary

This proposal asks DAO approval for deployment of a new Gearbox instance governed by Nexo, starting with USDT market. The goal is to give Nexo and K3 as a risk curator full ownership of the markets in the instance. It means that market parameters can be changed by Nexo without asking allowance from DAO (36h timelock delay still applies to it). No action is required from Gearbox technical multisig. By executing unpause transactions, Nexo agree with the resulting contracts configuration.

Motivation

The deployment of a new instance governed by Nexo, in partnership with K3 Finance as a risk curator, presents an opportunity for Gearbox DAO to expand its utility as a lending infrastructure provider. Nexo is a leading CeDeFi institution with $11B in Assets Under Management, operations across 150 jurisdictions, and over $320B in transaction volume since 2018. This partnership gives Gearbox access to a robust, high-profile partner. It paves the way for further expansion with Nexo across additional markets and chains, while pioneering a model Gearbox aims to adopt: permissionless risk curation by institutional market participants.

Specification

Fee sharing & liquidity boostrapping All fees generated by this instance will be automatically sent to safe multisig (0x349e22baeB15Da6fad00093b3873D5E16d5Bb842) controlled by Nexo & K3 designated Fireblocks wallet (0xe34A3fb26B3121F4E68bE89Ea553BaC2149F975d). This fees are to be split 50/50 between Gearbox DAO and Nexo with implementation to be finalized later.

Nexo is ready to bootstrap liquidity for this instance. Naturally, this liquidity will not be subject to separate fees. As a result, all fees generated by Nexo’s own capital will be returned to K3 through the referral program. Fees generated by external capital will be distributed according to the previously mentioned 50/50 split.

Admin rights and special permissions

Instance owner - K3 designated address. Namely safe multisig (0x3655Ae71eB5437F8FbD0187C012e4619064F9B4) with only signer to be set to K3 Fireblocks wallet (0xe34A3fb26B3121F4E68bE89Ea553BaC2149F975d) contingent on the voting result. K3 as an instance owner will be able to change admin roles and permissions on their discretion. The specification of initial config can be viewed here.

Risk parameters

K3 as a risk curator can change market parameters including but not limited to limits, LTs, quota rates on their discretion. The specification of initial config can be viewed here.

Access to Gearbox Infrastructure

Gearbox will display the Nexo instance on the frontend with the appropriate label. Additionally, Gearbox is expected to support instance monitoring, including an insolvency checker with the ability to pause the instance in case of potential bad debt detection, an optimistic liquidator infrastructure, and an emergency liquidator.

Implementation

It’s proposed to optimistically execute contracts deployment and instantly pause them using Instance owner multisig signed with EOA executor wallet (controlled by Gearbox core contributors). If the proposal passes, Gearbox DAO will transfer multisig ownership to K3 Fireblocks wallet (0xe34A3fb26B3121F4E68bE89Ea553BaC2149F975d) to further unpause the contracts.

Voting

Simple Approve/Reject