# Gearbox V3 Token incentives Methodology

## 1. Overview

Token incentives measures the value of native GEAR assets distributed to users, liquidity providers, and traders of Gearbox V3. These incentives are primarily utilized to bootstrap liquidity, reward active trading, and compensate protocol participants. By tracking these distributions, the cost of user acquisition and liquidity maintenance can be analyzed. This metric is considered analogous to stock-based compensation in traditional finance, representing a key operational expense for the protocol.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events from Gearbox V3 distributor contracts and the marketing multisig contract, and `Claimed` events from Merkl `Distributor` contracts, covering Ethereum
- **External data**: End-of-day price feeds and asset metadata for the GEAR asset

## 3. Step-by-step calculation

### Component A: Merkl reward claims

- **Purpose**: Capture GEAR rewards claimed by Gearbox V3 users through the Merkl distribution system
- **Logic**: `Claimed` events from Merkl `Distributor` contracts are parsed on Ethereum. Events are filtered to isolate claims where the claimed asset is matched to the GEAR contract address, the distributor is matched to the Merkl distributor address, and the event is not marked as removed. The recipient address and raw claim amount are extracted from each event.
- **Key fields**: `user_address`, `token_address`, `amount`

### Component B: Distributor and trader reward claims

- **Purpose**: Capture GEAR rewards distributed directly through Gearbox V3 farming pools and marketing multisig trader-reward epochs
- **Logic**: ERC-20 `Transfer` events are parsed on Ethereum. For distributor claims, transfers are filtered to include only those where the sender is matched to one of the designated Gearbox V3 distributor addresses and the recipient is not matched to the protocol treasury. For trader rewards, transfers are filtered to include only those where the sender is matched to the marketing multisig address, the transfer is executed within the specified epoch between July 29, 2024, and September 26, 2024, and the transaction hash is matched to the designated trader-reward transaction list. Only transfers of the GEAR asset are included.
- **Key fields**: `from_address`, `to_address`, `token_address`, `value`, `transaction_hash`

### Component C: USD conversion and aggregation

- **Purpose**: Normalize claimed asset amounts and convert them to USD
- **Logic**: Claimed amounts from Merkl and direct distributors are combined and aggregated by day. The raw asset quantities are normalized by dividing by the asset's decimal precision using asset metadata. The normalized quantities are then multiplied by the end-of-day price of the GEAR asset to determine the daily USD value of token incentives. Daily values are zero-filled for days with no activity.
- **Key fields**: `amount`, `timestamp`, `price_usd`

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

Value of native tokens distributed as incentives.

Token incentives

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 V3

Token incentives

Token incentives

Chain breakdown