[GIP-21] Leverage Ninja Mode & Limits for V2

https://snapshot.org/#/gearbox.eth/proposal/0x0d4129c183daac9e5a95ca16c2f56a1409d0853eec9427eae14712fb640a5222

Summary

This proposal includes limits for launching v2.

  • Leverage side (Credit Accounts): limits on who can open + amount allowed to borrow
  • Pool passive side (Earn): no limits whatsoever

It is proposed to launch Gearbox V2 in Leverage Ninja mode: the leverage side (aka Credit Accounts) will initially be restricted to a set of degen addresses who will help v2 test in production. That is, so we can see the system run live with real assets. Keep in mind that this list is enforced on a contract level, and is not an interface “trick”. Such a list keeps the system much more secure in the first months after the launch, and makes passive LPs sleep with ease. Why? It’s impossible for a hacker to drain the protocol using 100 accounts despite the limits. They can do it with a few accounts at best.

Ninja List TLDR + How to Become a Ninja!

NOTE: Throughout months, users could have opted in openly for that, and can continue doing so after V2 launch too! DAO members can just keep updating the list to keep the system secure yet inclusive. In case you want to be on the Ninja list, please comment with your twitter account (or other active social media account) and an address to be added to the Leverage Ninja mode list.

Only in extreme circumstances contributors of VIBES and community members can voice an opinion to not add an address to the list. That could be if an address has absolutely 0 transaction history, close to 0 balance while being anon, has been identified by Etherscan to be a malicious address, or other extreme circumstances. Otherwise, the access is pretty open.

Your choice: give a fresh address and be a non-anon, or be anon with enough balance and a regular address you use. Either works! Much like DAO governance, everyone is welcome! Discord / Forum.

Please keep in mind the minimum for CA users as proposed, will be min $100K borrow, meaning collateral would likely need to be min $15K before x8 leverage. Smaller farmers can stay on the passive side, for now, while V2 is in beta:

PS: the earn pool side (passive liquidity mining) will stay the same, and will not undergo any migration. It will also stay open to everyone, without any restrictions. If you are scared of leverage but still want to earn safe yields - that’s your place! There is no action to be undertaken right now.

Motivation

Launching a new version always creates additional risks. Of course, Gearbox Protocol has several audits (> 6 at this point, TBA). Nevertheless, this is not a guarantee of full safety, regardless of the protocol you use. Therefore, this proposal is intended to determine the optimal launch parameters in terms of finding balance between the ease of use and security.

Implementation

  • Only Ninjas will be able to open Credit Accounts.
  • Ninjas will be able to open 1-2 Credit Accounts only. Thus, adding limits to the Сredit Account will make the system more secure - if someone finds a vulnerability, it will most likely be more profitable for him to apply for a bug bounty on Immunefy than to do an exploit. That strongly de-incentivizes any malicious behavior even though the whole user set is anonymous as DeFi should be.
  • As per the note above (scroll to the quote in Summary section), Ninjas can just ask for a new address to be added, similar to how new users get added. But avoid closing and opening new accounts randomly, just to ensure you don’t have to wait for a new list to go up.

Limits

Gearbox Credit Managers have limits - the minimum amount of borrowed amount when opening a Credit Account and the maximum borrowed amount. These limits serve several purposes:

  • reducing the volatility of the borrow rates so that one Credit Account does not take all the funds from the pool,
  • decrease of potential funds at risk - due to the fact that a user can open a limited number of Credit Accounts, bad behavior is difficult to scale, and limits allow protocol to limit the potential damage.
  • The minimum amount allows to adjust the parameters so that liquidators have the necessary incentives to liquidate credit accounts.
Credit Manager Min borrow amount Max borrow amount
ETH 75 600
BTC 5.5 50
USDC 100 000 1 000 000
DAI 100 000 1 000 000
wstETH 75 600

Min borrow amount is calculated so that 4% liquidation fee should be enough to incentivize liquidators even during gas price spikes (see [GIP-20] Update Fees & Interest rate curves for calculations).

Max borrow amount is calculated so that 15-20% of funds on Credit Account should be approx. equal to Immunefy bug bounty amount. Ofc this is not a guarantee, but it seems to me that in this case it would be more interesting to apply for a bounty…

Passive Earn side limits: NONE

Passive Earn side will have no limits per any pool as V2 presents countless opportunities for the capital to be utilized. In fact, the LM discussion targets a $50-75M TVL across 5 pools, meaning that over-supplying of capital is basically de-incentivized by then-reducing yields.

8 Likes

No objection to these limits. I’ll be scaling into my use of Lev. to minimise risk and allow greater community adoption battle-test the protocol.

Looks good to me. You have my vote for it.

@nftmatrix 0x5881d9BfFf787C8655A9b7F3484aE1a6f7a966E8 for leverage ninja ser

Twitter @dustin179 - please include my address in list - 0x84f918BA377cbd0385B4Ef28F6b2b6d7E9B54a4B

@mastermojo83 0xF68D2BfCecd7895BBa05a7451Dd09A1749026454

twitter @blockmechain
0x9A6d3Ecc81C08Cdaf4f9379c36EC0746441F1533

pls include my address : 0xbDfA4f4492dD7b7Cf211209C4791AF8d52BF5c50

Would love to be among the degens :smiley:
Twitter acc: UnderGCrypto
Addy: 0xF6f7c64EE5DD7280b1519f81968375C1442BA036

please include me

twitter: deloochs
address: 0x725Fc8fE91DcF9343DD80342A93E45F2923c7334

Twitter: kootjekoo

0xB61f46f15BC42608B5905a4dC3E75755dE9DBfe4

Please add me as well =) Thank you sensei!
Twitter: cadilhabl
0xbb37868971982822218A10D750603dBC5eD7386f

1 Like

Twitter: @0xZOZ

0xd240A74c8766cbe9Fc0ba2B242C089aAE164D5dF

If some are not comfortable disclosing nickname / twitter / etc. for privacy reasons - just DM one of core gearheads to help you with the process. Like me on Discord, I can help you out.

@japan91759896
0x78b8A76BEa31733777556033e2a116df66C4C41C

My body is ready 0x79b1a32ec97537486e75d99850bd56ecfa09d643

@ArmSlave001 0xc90f4fB05116eF4325E992C83E96266Eb574edc2

Sounds good frens, here’s my addy: 0x8325Aff2Ccc014468Cdf20F2538D8534db7a100f
@theyieldfarmer

Pls include @edpang6 : 0x23807719299c9ba3c6d60d4097146259c7a16da3

Please include 0x8075df8A555048bFF338b04e7aF5De5Ee9565F73

I will reach out via discord

1 Like