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.
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.
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.
- 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.
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|
|USDC||100 000||1 000 000|
|DAI||100 000||1 000 000|
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 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.