Gearbox Is Releasing Its V3 — Here’s What’s New

Latest features include a new lending pool and the introduction of immutable smart contracts

article-image

Kapustin Igor/Shutterstock.com modified by Blockworks

share

Gearbox, a composable leverage protocol, has released a V3 upgrade that aims to redefine leverage and lending.

This latest upgrade will build on top of Gearbox’s V2 capabilities by bringing on new liquidity pools, tokens, and the introduction of an immutable smart contract — which is designed to enable better user experience (UX) and allow for further cross-chain deployments without increasing risk.

A composable leverage protocol, in Gearbox’s case, aims to improve capital efficiency by giving users access to leverage across various DeFi protocols.

In V2, the experience around limit orders and portfolio automation is largely restricted to centralized exchanges or layer-2 protocols, where much of the work is handled off-chain, the pseudonymous mugglesect told Blockworks. 

“We will be bringing automation on-chain, where you can effectively create bots, which are scripts that would run a trading strategy without you having to custody the customer’s funds,”    mugglesect said. “Effectively, operating a trustless fund on-chain becomes possible with V3.”

Liquidity pool expansion

Liquidity pool providers will have the option to remain on the existing Main Bluechip lending pool or move to a new “Alpha passive” lending pool.

Unlike traditional DeFi lending protocols — where borrowers maintain custody over borrowed funds — mugglesect said Gearbox borrowers would not have custody over the assets they borrow from liquidity providers. 

“Borrowers actually never have custody over [assets], and [aren’t] allowed to swap them or put them into protocols that can be considered unsafe or illiquid,” he said. 

The up-and-coming upgrade, however, is set to allow liquidity providers the option to opt into higher risk exposures and reap a higher annual percentage yield (APY) in return. 

“Effectively the decision will be made by the lenders,” he said. 

Potential tokenomics revenue share

The V3 upgrade is also bringing to market “Minimum Viable Tokenomics” for GEAR, the protocol’s native token.

GEAR stakers, as a result, will be able to determine where the revenue earned through the Alpha Pool should go — and how it should be distributed.

Although profit sharing for GEAR holders is not yet available, the protocol has indicated that profit sharing is possible down the line.  

“What is important is that there is an extra revenue source now,” mugglesect said. “Effectively, the devs create the capability of token utility via staking while the DAO decides how they want to actually execute the value accrual.”

Code for Gearbox’s V3 upgrade is currently being audited. A launch date is likely to be finalized by the end of the second quarter.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Unlocked Advisory-min.png

Research

This report distills Blockworks Advisory’s research on incentive programs and their analysis, offering a foundation for designing future initiatives and advancing industry-wide standards. By highlighting key lessons and methodologies, we aim to empower protocols to make informed, data-driven decisions.

article-image

Bitcoin is now the “seventh most valuable asset in the world by market cap, just behind the likes of Google and Amazon,” GSR’s Brian Rudick said

article-image

Many analysts expected bitcoin to top $100K before year-end, though it’s been on a post-election tear

article-image

Will investors take a 10% lower return to get access to a regulated investment wrapper?

article-image

Brian Armstrong called out the hire of Gurbir Grewal, who had been the SEC’s enforcement division director since 2021

article-image

Certain senators will be interested to learn about Atkins’s private sector business interests, specifically those related to crypto

article-image

Innovative smart debt and collateral features are fueling Fluid’s rise to $1.2 billion TVL, reshaping the Instadapp brand