Gearbox

Gearbox is a generalized leverage protocol that lets users take leverage from one place, then utilize it in a composable manner across different DeFi protocols and platforms. Gearbox possesses two sides: 1) the passive liquidity providers earning more APY by providing liquidity, and 2) the active traders, farmers, and protocols able to borrow the assets in order to trade with leverage.

The platform works when users open a credit account, which is an isolated smart contract containing the user funds and the borrowed funds. Every operation goes through the account. Users then choose their collateral. The credit accounts are denominated in the collateral that the user opened it in, like BTC, ETH, DAI, etc. The positions within the account are then calculated in the asset identical to cross-margin. When a user funds their account, they get leverage. The leverage amount a user borrows comes with an interest rate they are required to pay. Users can manage credit accounts since they possess a liquidation threshold.

Gearbox's native token is $DIESEL, and it is the protocol’s LP token. Users can deposit liquidity in a given pool in order to receive $DIESEL. In return, the token holders start accumulating interest via the capital available in the liquidity pool, and it is utilized in powering credit accounts. In addition, token holders receive a part of protocol fees that are proportional to their own share of a given pool.