Protocol DAO
Unlike traditional DeFi protocols where the DAO manages risk parameters (like LTVs or Interest Rates) directly, Gearbox delegates these operational responsibilities to Market Curators. The DAO focuses on building the rails, while Curators operate the trains.
Core Responsibilities
1. System Upgrades & Versioning
The DAO maintains the core smart contracts that define the protocol's logic. It is the only entity capable of authorizing new versions of system components.
Contract Updates: The DAO votes to deploy and authorize new implementations of core contracts (e.g.,
PoolV3,CreditManagerV3).Bytecode Repository: The DAO manages the onchain registry of verified contract bytecode. This ensures that when Curators deploy new markets, they are using secure, audited code approved by the protocol.
2. Chain Activation
The DAO controls the expansion of the protocol to new blockchain networks.
Instance Deployment: Before Gearbox can operate on a new chain (e.g., Arbitrum, Optimism), the DAO must authorize the deployment of the Instance Owner and Treasury contracts on that network.
Canonical Addressing: The DAO ensures that there is a single, canonical instance of the protocol infrastructure on each supported chain, preventing fragmentation.
3. Economic Alignment (GEAR Token)
The DAO utilizes the GEAR token to incentivize growth and align the interests of Curators, Liquidity Providers (LPs), and the protocol.
Incentive Programs: The DAO can vote to allocate GEAR tokens for liquidity mining or grants to bootstrap specific markets or integrations.
Fee Split Configuration: While Curators set the total fees for their markets, the DAO defines the protocol-level Fee Split (e.g., 50/50 split between Curator and DAO). Changing this global parameter requires a DAO vote.
Limits of Authority
To preserve the permissionless nature of the protocol, the DAO's power is strictly limited at the smart contract level.
No Market Interference: The DAO cannot change the risk parameters (LTVs, Liquidation Thresholds, Interest Rates) of a live market managed by a Curator.
No Asset Management: The DAO cannot seize or reallocate funds deposited into Curator-managed pools.
This separation of powers ensures that Curators retain full sovereignty over their lending businesses.
Learn More
Risk management & operations: Who manages risk parameters and oversees day-to-day market operations?
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