Risk Configuration Dictionary

Flexibility is at the core of Gearbox’s design. Credit Accounts support a wide range of on-chain assets as collateral, which requires a risk framework capable of handling diverse asset properties. Gearbox’s risk controls are built to operate under uncertainty and adapt to any market conditions.

Gearbox is a platform for the permissionless creation and curation of lending markets. To participate safely, both Curators and Users must understand the risk-control allowlist: Curators need to know the capabilities it grants, while Users should understand the trust assumptions they accept when engaging in lending activity.

Curator Roles

The Curator utilizes two primary roles to modify market parameters:

• Admin
  Can modify all configurable parameters, subject to a minimum 24-hour timelock.
• Emergency Admin
  Can update a limited set of risk parameters instantly (without timelock) to mitigate immediate threats.

Pool-Level Rules

These parameters define the global constraints for the Liquidity Pool. If a user disagrees with these terms, they must select a different pool.

Pool parameter definitions

• Total debt limit: Maximum amount of underlying assets that can be borrowed across the entire pool.
• Collateral limit: Maximum amount of debt that can be backed by a specific collateral token (Quota Limit).
• Main Price Feed: Primary price source used for calculating account value and triggering liquidations.
• Reserve Price Feed: Secondary price source used to run safety checks on operations; can block Credit Account actions to protect LPs.
• Increase Rate: One-time fee charged whenever exposure to a collateral increases.
• Collateral-specific rate: Additional interest rate (APR) charged for borrowing against a specific collateral.
• IRM: The Utilization-based Interest Rate Model contract.
• Loss Policy: The logic executed when a liquidation results in bad debt.
• Emergency liquidators whitelist: Addresses authorized to liquidate accounts when the Credit Manager is paused (Default: Permissionless).
• Loss liquidators whitelist: Addresses authorized to execute liquidations that result in bad debt (Default: Permissionless).

Pool permissions matrix

Credit Manager-Level Rules

These parameters define the strategy for a specific Credit Manager. If a user disagrees with these terms, they can choose another Credit Manager within the same pool.

Credit Manager parameter definitions

• Total debt limit: Maximum aggregate debt of all Credit Accounts created from this Credit Manager.
• MinDebt: Minimum required debt to open a Credit Account.
• MaxDebt: Maximum permitted debt per Credit Account.
• Liquidation Premium: Percentage of collateral value paid to the liquidator as an incentive.
• Liquidation Fee: Percentage of collateral value paid to the Protocol (Curator & DAO).
• Max Enabled Tokens: Maximum number of collateral tokens a single account can enable simultaneously.
• Interest Fee: Percentage of borrowing interest captured as revenue (split between Curator & DAO).
• Collateral's LT: The Liquidation Threshold (Loan-to-Value ratio).
• Collateral's forbidden status: Controls whether a token is allowed or forbidden.
• List of allowed adapters: Restricts which external contracts (e.g., Uniswap, Curve) a Credit Account can interact with.
• Expiration Policy: Date after which the strategy winds down. After this date, all Credit Accounts become liquidatable regardless of Health Factor.

Credit Manager permissions matrix