This is an awesome project that helps to boost your yield from traditional DeFi projects as Curve, Convex, Yearn, etc.
Gearbox protocol focuses on leverage. Users should provide collateral and then they can borrow up to 10x leverage. They have approved assets as collateral (now ~31 unique) and approved protocol where you can invest (now ~15). One more unique feature about this project is that they create special credit account - an isolated smart contract that holds user's and borrowed funds. It means that users cannot withdrawal their borrowed funds and invest in not credible protocols.
How they achieve leverage? There is a second side of gearbox - lenders. They deposit funds as in traditional finance (DAI, USDC, WETH, WBTC, wstETH, and FRAX) and get interest on it. Then their funds are used by borrowers. However, for me I don't really get for what reasons these people provide their funds, because their funds are used by borrowers in more risky way, hence, they got higher interest rate, but it turns out that borrowers use lenders funds with higher yields and share a small portion with lenders. So lenders could do it themselves, since their funds are used anyway and get a higher rate on them, my thought is that both lenders and borrowers use funds with projects with the same risk, but borrowers get much higher yields than lenders. Maybe someone doesn't want to just deal with everything and it's easier to be lenders.
Why did I give it 4 stars for the idea? I'll tell you in the next posts Show Less
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