When a protocol's income has reached 40% of Pendle's, but its market value is only 4% of the latter's; when its income has already surpassed Tornado Cash and Moonwell yet remains underpriced by the market; when it is using income to repurchase its tokens, and all tokens are unlocked without sell pressure risks—we know that this is no longer just an 'undervalued' protocol, but a verified, rising lending infrastructure.
This is Gearbox. As the DeFi market gradually enters the institutionalization stage, the credit market is becoming a key infrastructure for every asset to expand liquidity and capital efficiency. For emerging assets such as liquid staking (LST) and liquidity re-staking (LRT), the lending market not only determines the usage scenarios of assets but also affects the expansion capacity of the entire ecosystem. Traditional DeFi lending protocols clearly can no longer meet this multidimensional institutional demand.
Existing DeFi lending markets generally face several fundamental problems. First, the interest rate mechanism lacks risk adjustment capability: regardless of whether you pledge blue-chip assets or long-tail assets, the borrowing interest rates are often uniform, leading to undervaluation of high-quality collateral while poor collateral receives no support. Second, liquidity is severely fragmented: each type of collateral asset often requires an independent lending market, resulting in low capital utilization and poor user experience. Lastly, institutional users cannot set rules based on their own needs, having to 'use others' markets', lacking sufficient flexibility and control.
The pool-to-account mechanism proposed by Gearbox accurately addresses these issues. Its core is that each borrower has their own 'credit account', while the liquidity pool is shared. This design retains the advantages of centralized liquidity while allowing independent risk management for each account, supporting different borrowing rates for different collaterals and ensuring the overall system's risk isolation. Lending is no longer one-size-fits-all, but a customizable, controllable, and scalable credit market.
As the largest and most trusted liquid staking protocol globally, Lido was the first to taste the benefits. The cumulative trading volume of wstETH on Gearbox has exceeded $1 billion, making it one of the most active liquid staking assets. This not only indicates the wide application of wstETH but also reflects the urgent demand from Lido users for an efficient and secure lending market.
Gearbox is a dedicated credit market provided for Lido, fundamentally changing its capital usage. The wstETH liquidity pool features a dynamic interest rate mechanism that adjusts based on risk, allowing high-quality collateral to truly obtain lower capital costs. At the same time, new tokens such as rstETH and dvstETH can also directly receive lending support on Gearbox, expanding the funding usage scenarios for its ecosystem.
For institutional users, Gearbox is not just a more optimized lending market, but also an institutional-level liquidity management tool. Institutions can lend wstETH on Gearbox without loss, gaining base income, borrowing rates, and additional incentives while retaining capital liquidity. This design greatly enhances asset utilization efficiency and improves the overall user experience.
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Gearbox not only provides a more efficient DeFi lending mechanism but also builds a credit market infrastructure tailored for institutions, meeting institutional-level needs from capital efficiency to security management. Gearbox collaborates with Chaos Labs to provide professional risk management for all lending markets within the ecosystem, helping institutions optimize interest rate mechanisms, assess collateral asset risks, and set reasonable liquidation rules to make capital operations safer and more controllable.
Higher capital utilization: a lending pool supports multiple asset lending, avoiding liquidity fragmentation and allowing institutional users to manage capital more flexibly, improving capital usage efficiency.
Institutional-grade security: Gearbox has operated stably for three years without major security incidents, has undergone more than ten security audits, and is equipped with an AI monitoring system for real-time market risk monitoring, ensuring the robustness of the lending environment.
Highly customizable: Institutions can freely set risk parameters, flexibly adjust borrowing rates, and formulate more precise borrowing rules for different categories of collateral assets, making capital management more efficient and personalized.
From the data, Gearbox's potential is far from being priced by the market. Its weekly income has exceeded Tornado Cash (valued at approximately $77 million) and Moonwell (valued at approximately $105 million), reaching 40% of Pendle's, yet Gearbox's current FDV is only $30 million, with all tokens fully unlocked, eliminating future unlocking sell pressure risks.
More critically, this portion of income will not be 'sunk' but will be used to repurchase GEAR LP tokens starting next month, accounting for 25% of income. This means Gearbox not only creates lending revenue for users and institutions but also directly enhances the secondary market value of GEAR through the protocol-level repurchase mechanism. This design provides clear positive incentives and exit mechanisms for institutional investors, addressing the long-standing issue of DeFi lending protocols being 'technically good but lacking an economic closed loop.'
Gearbox solves the problems of low capital utilization, inadequate risk adjustment, and fragmented liquidity in traditional DeFi lending markets through its pool-to-account mechanism, shifting the lending market from 'generic' to 'customized'. The introduction of a dedicated credit market allows protocols and institutions to establish independent lending pools based on their needs, enhancing capital efficiency while also providing a solid credit foundation for the further development of assets like LST and LRT. Meanwhile, Gearbox operates with institutional-grade security standards for three years, combining Chaos Labs' risk management, AI monitoring system, and multiple security audits to provide a stable and reliable lending environment for institutions.
As the DeFi credit market gradually evolves towards institutionalization, Gearbox is not just a lending protocol but also the infrastructure supporting the operation of the entire DeFi ecosystem's credit system. Its flexibility, security, and efficiency make it the best choice for institutional-level DeFi lending markets.
