Credit Accounts (The Primitive)
The Credit Account is the fundamental primitive of the Gearbox Protocol. It functions as a user-owned, isolated smart contract wallet that holds both collateral and borrowed funds, enabling leveraged execution across DeFi protocols.
Core Concept: Isolated Smart Contract Wallet
Unlike traditional lending protocols where user collateral is siloed in a global vault, Gearbox deploys a unique smart contract for each borrower.
The Credit Account serves as a container for the user's entire position.
Segregated State: Assets within the Credit Account are legally and technically distinct from the protocol's liquidity pools.
User Ownership: The user retains control over the account's operations, subject only to the solvency checks enforced by the Credit Manager.
Portability: Because the Credit Account is a standard smart contract, it can interact with external protocols as a distinct entity, preserving the identity of the position.
Atomic Solvency Check
The Credit Account operates on a "Check-on-Exit" architecture. The protocol does not restrict specific actions within a transaction bundle, provided the account remains solvent at the conclusion of the execution trace.
Upon the completion of any interaction (e.g., a swap or deposit), the protocol calculates the account's Health Factor.
If Health Factor > 1: The transaction is finalized and recorded on-chain.
If Health Factor < 1: The entire transaction reverts, ensuring no bad debt can be created atomically.
This mechanism allows users to perform complex, multi-step operations in a single transaction without requiring the protocol to understand the intermediate states, as long as the final state satisfies the risk parameters.
Composability via Adapters
The Credit Account interacts with the external DeFi ecosystem through Adapters. These are lightweight contract interfaces that translate generic user intents into protocol-specific function calls.
From the perspective of an external protocol, the Credit Account appears as a standard user wallet. This enables:
Native Execution: Users interact directly with external contracts rather than through a protocol-specific abstraction layer.
Programmable Credit: Developers can compose credit logic into arbitrary workflows, treating the Credit Account as a programmable leverage module.
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Risk Enforcement: the logic for calculating the Health Factor and enforcing solvency is managed by the Credit Manager and Credit Facade.
External Interactions: The mechanism for connecting Credit Accounts to external DeFi protocols is defined by the Adapter system.
Liquidity Source: The capital borrowed by the Credit Account is sourced from the passive Liquidity Pool.
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