Gearbox DAO

One of our key goals with V3 was to reduce the reliance on GEAR emissions and boost organic rates. We took our first step towards that with GIP-85 as we partly the V2 emissions without moving them to V3 pools. Now, as a next step, we intend to completely cut the V2 LM without moving any of that GEAR emissions to V3 pools. And this GIP proposes exactly that.

• Cut the remaining GEAR LM Emissions on V2’s USDC and DAI pools by 100%. This would reduce the GEAR LM by a further of ~24% and 0.36% of the supply annually.
• No movement of the saved GEAR to V3 pools.

The exact details of the savings and the 2nd amendment to GEAR LM is mapped out in the table above. Overall between 1st and 2nd cut, that is about ~1.5% total supply being saved up per year, which is a significant step, see more here.

V3 pools don’t need the additional GEAR emissions since their organic rates make lending sustainable enough, or at least that’s the plan. This is made possible by leverage side integrations that make higher borrow rates possible without hurting leverage takers. PURE’s first two weeks saw organic rates rise to over 5% at <50% utilisation(cap reached) on the USDC pool. And with V3 farms with higher farming APYs being added next, the organic rates on ETH and other pools is likely to rise too. This is crucial to grow the protocol without disrupting $GEAR inflation and tokenomics. While it’s still early to call it a win, progress is being made in this direction.