# Gearbox V1 Expenses Methodology

## 1. Overview

Expenses measures the total cost incurred by Gearbox V1 to operate its business. For Gearbox V1, these expenses are comprised of asset incentives distributed to users. These incentives are paid out in the protocol's governance asset (GEAR) to reward liquidity providers and early participants. Traditional operating expenses and cost of revenue are not captured or are set to zero for this version of the protocol.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events from the Gearbox V1 distributor contract, covering Ethereum
- **External data**: End-of-day price feeds and asset metadata for the GEAR asset

## 3. Step-by-step calculation

### Component A: Distributor claim extraction

- **Purpose**: GEAR incentives claimed by users from the Gearbox V1 distributor contract are identified and extracted.
- **Logic**: ERC-20 `Transfer` events of the GEAR asset are filtered where the sender is the Gearbox V1 distributor contract (`0xa7df60785e556d65292a2c9a077bb3a8fbf048bc`) and the recipient is not the protocol treasury address. The transfer values are extracted as raw incentive claim amounts.
- **Key fields**: `value`, `to_address`, `from_address`, `token_address`

### Component B: Normalization and USD conversion

- **Purpose**: Raw claim amounts are converted into USD values.
- **Logic**: Raw claim amounts are normalized by the decimal precision of the GEAR asset using asset metadata. The normalized amounts are then multiplied by the end-of-day price of the GEAR asset obtained from end-of-day price feeds.
- **Key fields**: `amount`, `price_usd`

### Component C: Daily aggregation

- **Purpose**: USD-denominated expenses are aggregated to a daily granularity.
- **Logic**: The USD-denominated asset incentives are summed by day using UTC boundaries. Since other expense categories, such as cost of revenue and bad debt, are not applicable or are set to zero for Gearbox V1, the aggregated daily asset incentives are utilized as the total daily expenses for the protocol.
- **Key fields**: `timestamp`, `expenses`

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total project operating and incentive expenses.

Expenses

Lending

Lenders deposit funds into Gearbox and receive interest payments from borrowers.

Gearbox is a non-custodial lending protocol built on Ethereum. Gearbox was founded by Mikhail Lazarev and launched in 2021.

GEAR tokenholders own and govern the protocol. They currently take a cut of the total interest paid by borrowers (revenue).

Gearbox V1

Expenses

Expenses

Chain breakdown