Proposal

Allocate 25% of all future realized revenue to purchase Gear/wETH Uniswap V2 LP tokens. Allocate up to $15k USDC to develop a zap tool to allow the multisig to easily convert revenue to LP tokens in a single transaction.

This proposal aims to align GEAR holders with the protocol roadmap by creating a direct relationship between GEAR value and revenue earned.

Context

2025 Narrative Expansion - Permissionless Credit Layer

In 2024, Gearbox achieved product market fit, notably in the LRT/points farming narrative. The 2025 roadmap seeks to transform from composable leverage to a full-stack permissionless credit later (https://blog.gearbox.fi/gearbox-protocol-2024-recap-and-wind-of-change/) on top of expansion to new chains - all of which will enhance volume, total value locked (TVL), and use cases, and with those may come an increase in revenue.

Currently, the GEAR token has limited use in gauges and Snapshot, which requires active involvement with no direct reward. Past discussions have considered deeper ties between GEAR and protocol success, but implementation has been postponed due to the focus on the product - a trend set to continue in 2025. This proposal aims to remedy that issue in a simple-to-execute manner.

**It is important to tie GEAR to protocol success now to ensure the 2025 roadmap has full support from the community rather than split attention between GEAR tokenomics and product. **

The Numbers (As of February)

Per the revenue dashboard (https://dune.com/gearbox_fi/gearbox-protocol#dao-fee-revenue) , the total realized revenue is ~$500k over the last 6 months. If sustained, a year of buybacks with 25% of revenue would correspond to an 4.5% price increase at the current size of the Curve GEAR/wETH liquidity pool (as of 2/14/2025).

Per the treasury dashboard (https://gearbox.tokenlogic.xyz/treasury), treasury holds $3.9m (not including GEAR) with annualized expenses of $2.9m. Implementing this proposal would shorten the current runway from 1.7 to 1.4 years. However, this proposal does not change the fact that the runway is currently growing so long as annual revenue is greater than $2.9m and/or as long as ETH increases in value in 2025. Additionally, if GEAR value increases as a result of this proposal, the runway will be extended further.

Execution:

Realized revenue comes in the form of many tokens. The following execution steps are recommended:

• Ov3rkoalafied to use up to 15k USD of funding from Gearbox DAO (estimated budget = $10k USDC) to hire a developer to build a front-end interface to easily swap revenue tokens into a GEAR/wETH Uni v2 LP position
  • NOTE: A developer already built a similar interface for Alchemix that has been in use for 6+ months, this developer can fork the interface for the Gearbox multisig’s needs.
  • Estimated completion time - 4-6 weeks.
• Gearbox multisig to utilize above interface to redirect 25% of revenue (based on valuation at time of swap) to a Uniswap V2 GEAR/wETH pool using the tool above, or any other approach they deem appropriate.

In short, a simple aggregation front end will allow the multisig to periodically swap revenue into GEAR/wETH Uniswap V2 LP tokens.

*NOTE: the multisig may carry out operations for this proposal without the custom interface, however it would be significantly more time-consuming (orders of magnitude more time-sensitive txns) and thus is not recommended. *

Future:

This is step 2 of tying GEAR value to protocol success (step 1 was gauges). In the future, revenue % can increase and/or more unique integrations can be considered, but this way the 2025 roadmap can focus on product with success directly benefitting GEAR token holders.

Voting options:

For/against/abstain to:

• Use 25% of future revenue to buy GEAR/wETH Uniswap V2 LP Tokens
• Allocated up to $15k USDC of funding to hire a developer to build a zap tool to easily convert from revenue tokens to LP tokens, to be managed by Ov3rkoalafied.