Motivation

Gearbox V2 has passed external audits and is about ready for deployment on Mainnet.

V2 includes integrations with Lido, Curve, Convex, and Yearn protocols and allows new leveraged strategies for high-yield farming and trading. Those protocols have well-established processes, reliable infrastructure as well as strong community support.

The V2 strategies involve assets that can be leveraged using Curve, Convex, and Yearn:

Pool	LP Token Address
Curve ETH+stETH	0x06325440D014e39736583c165C2963BA99fAf14E
Convex Curve ETH+stETH	0x9518c9063eB0262D791f38d8d6Eb0aca33c63ed0
Curve FRAX+3Crv	0xd632f22692FaC7611d2AA1C0D552930D43CAEd3B
Convex Curve FRAX+3Crv	0xbE0F6478E0E4894CFb14f32855603A083A57c7dA
Curve FRAX+USDC	0x3175Df0976dFA876431C2E9eE6Bc45b65d3473CC
Convex Curve FRAX+USDC	0x117A0bab81F25e60900787d98061cCFae023560c
Curve 3pool (DAI+USDC+USDT)	0x6c3F90f043a72FA612cbac8115EE7e52BDe6E490
Convex 3pool (DAI+USDC+USDT)	0x30D9410ED1D5DA1F6C8391af5338C93ab8d4035C
Curve LUSD+3Crv	0xEd279fDD11cA84bEef15AF5D39BB4d4bEE23F0cA
Convex Curve LUSD+3Crv	0xFB9B2f06FDb404Fd3E2278E9A9edc8f252F273d0
Curve DAI+USDC+USDT+sUSD	0xC25a3A3b969415c80451098fa907EC722572917F
Convex Curve DAI+USDC+USDT+sUSD	0x11D200ef1409cecA8D6d23e6496550f707772F11
Curve GUSD+3Crv	0xD2967f45c4f384DEEa880F807Be904762a3DeA07
Convex Curve GUSD+3Crv	0x15c2471ef46Fa721990730cfa526BcFb45574576
USDC yVault	0xa354F35829Ae975e850e23e9615b11Da1B3dC4DE
DAI yVault	0xdA816459F1AB5631232FE5e97a05BBBb94970c95
WETH yVault	0xa258C4606Ca8206D8aA700cE2143D7db854D168c
WBTC yVault	0xA696a63cc78DfFa1a63E9E50587C197387FF6C7E
Curve stETH Pool yVault	0xdCD90C7f6324cfa40d7169ef80b12031770B4325
Curve FRAX Pool yVault	0xB4AdA607B9d6b2c9Ee07A275e9616B84AC560139

Token	Address
yvUSDC	0xa354F35829Ae975e850e23e9615b11Da1B3dC4DE
yvDAI	0xdA816459F1AB5631232FE5e97a05BBBb94970c95
yvWETH	0xa258C4606Ca8206D8aA700cE2143D7db854D168c
yvWBTC	0xA696a63cc78DfFa1a63E9E50587C197387FF6C7E
yvCurve-stETH	0xdCD90C7f6324cfa40d7169ef80b12031770B4325
yvCurve-FRAX	0xB4AdA607B9d6b2c9Ee07A275e9616B84AC560139
steCRV	0x06325440D014e39736583c165C2963BA99fAf14E
cvxsteCRV	0x9518c9063eB0262D791f38d8d6Eb0aca33c63ed0
FRAX3CRV-f	0xd632f22692FaC7611d2AA1C0D552930D43CAEd3B
cvxFRAX3CRV-f	0xbE0F6478E0E4894CFb14f32855603A083A57c7dA
crvFRAX	0x3175Df0976dFA876431C2E9eE6Bc45b65d3473CC
cvxcrvFRAX	0x117A0bab81F25e60900787d98061cCFae023560c
3Crv	0x6c3F90f043a72FA612cbac8115EE7e52BDe6E490
cvx3Crv	0x30D9410ED1D5DA1F6C8391af5338C93ab8d4035C
LUSD3CRV-f	0xEd279fDD11cA84bEef15AF5D39BB4d4bEE23F0cA
cvxLUSD3CRV-f	0xFB9B2f06FDb404Fd3E2278E9A9edc8f252F273d0
crvPlain3andSUSD	0xC25a3A3b969415c80451098fa907EC722572917F
cvxcrvPlain3andSUSD	0x11D200ef1409cecA8D6d23e6496550f707772F11
gusd3CRV	0xD2967f45c4f384DEEa880F807Be904762a3DeA07
cvxgusd3CRV	0x15c2471ef46Fa721990730cfa526BcFb45574576
sUSD	0x57Ab1ec28D129707052df4dF418D58a2D46d5f51
FRAX	0x853d955aCEf822Db058eb8505911ED77F175b99e
gUSD	0x056Fd409E1d7A124BD7017459dFEa2F387b6d5Cd
LUSD	0x5f98805A4E8be255a32880FDeC7F6728C6568bA0
stETH	0xae7ab96520DE3A18E5e111B5EaAb095312D7fE84
CRV	0xD533a949740bb3306d119CC777fa900bA034cd52
CVX	0x4e3FBD56CD56c3e72c1403e103b45Db9da5B9D2B
FXS	0x3432B6A60D23Ca0dFCa7761B7ab56459D9C964D0
LDO	0x5A98FcBEA516Cf06857215779Fd812CA3beF1B32
SNX	0xC011a73ee8576Fb46F5E1c5751cA3B9Fe0af2a6F
LQTY	0x6DEA81C8171D0bA574754EF6F8b412F2Ed88c54D

All of the assets conform to main risk requirements: deep DEX liquidity, a viable tokenomic model, and the existence of Chainlink price-feed for underlying tokens (except for LDO and LQTY).

DEX Liquidity can be tracked using the risk-committee report: https://datastudio.google.com/reporting/a95186ae-29b4-4d72-8807-612bb5f54dd0/page/p_nm4zx1i4uc

Chainlink price-feeds: https://data.chain.link/ethereum/mainnet

To mitigate the risks of malicious exploitation, V2 will be gated on the first phase using the set of whitelisted addresses (Leverage Ninja mode). To bootstrap TVL, whitelisted participants have committed to a minimum $50k entry.

Given V2 is around the corner with a tentative ETA soon after the Merge, it’s crucial to consider all the associated risks and decide on the Allowed List policy for V2. The new parameters aim to give greater leverage ability for the less risky collateral assets as well as to reduce leverage for the more risky ones.

Proposal

Taking into account V1 experience and expectations from the upcoming V2, I propose changes as below:

1. Create a new pool: wstETH 0x7f39C581F595B53c5cb19bD0b3f8dA6c935E2Ca0 with the same parameters as for the ETH pool. This would help to attract liquidity from stETH holders and also allow less risky stETH borrowing and bigger leverage when using stETH as collateral.

The pool parameters have to be adjusted to satisfy the expected demand during gated Leverage Ninja mode.

2. Set up Asset LTs as below for V2 assets:

Token	USDC pool (%)	DAI pool (%)	WETH pool (%)	wstETH pool (%)	WBTC pool (%)
WETH	85	85	94.5	90	85
stETH	82.5	82.5	90	94.5	82.5
WBTC	85	85	85	85	94.5
USDC	94.5	92	82.5	82.5	82.5
DAI	92	94.5	82.5	82.5	82.5
USDT	90	90	82.5	82.5	82.5
sUSD	90	90	82.5	82.5	82.5
FRAX	90	90	82.5	82.5	82.5
gUSD	90	90	82.5	82.5	82.5
LUSD	90	90	82.5	82.5	82.5
steCRV	82.5	82.5	90	90	82.5
cvxsteCRV*	82.5	82.5	90	90	82.5
FRAX3CRV-f	90	90	80	80	80
cvxFRAX3CRV-f*	90	90	80	80	80
3Crv	90	90	80	80	80
cvx3Crv*	90	90	80	80	80
LUSD3CRV-f	90	90	80	80	80
cvxLUSD3CRV-f*	90	90	80	80	80
crvPlain3andSUSD	90	90	80	80	80
cvxcrvPlain3andSUSD*	90	90	80	80	80
gusd3CRV	90	90	80	80	80
cvxgusd3CRV*	90	90	80	80	80
crvFRAX	90	90	80	80	80
cvxcrvFRAX*	90	90	80	80	80
yvDAI	90	90	80	80	80
yvUSDC	90	90	80	80	80
yvWETH	82.5	82.5	90	90	80
yvWBTC	82.5	82.5	80	80	90
yvCurve-stETH	82.5	82.5	90	90	82.5
yvCurve-FRAX	90	90	80	80	80
CVX	25	25	25	25	25
FXS	25	25	25	25	25
LQTY**	0	0	0	0	0
CRV	25	25	25	25	25
LDO**	0	0	0	0	0
SNX	25	25	25	25	25

LTs (Liquidation thresholds) above address the demand for higher leverage on base assets and stablecoins and reflect the absence of interest on the majority of the tokens in V1 so far. It is expected that CVX, FXS, LQTY, CRV, LDO, and SNX would be used as farming rewards rather than leveraging trading on them, therefore high LT values are unnecessary. This can be reconsidered later if there will be proven demand for higher leverage.

*Staked Convex positions have the same LTs as the corresponding Convex tokens (this is implemented on the Gearbox smart-contract level).

**LDO and LQTY have no Chainlink USD price-feed.