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).

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Gearbox

# Gearbox Supply-side fees Methodology

## 1. Overview

Supply-side fees is defined as the share of total fees generated by Gearbox that is distributed to service providers and protocol participants. These service providers are identified as liquidity providers (lenders) earning interest and quota fees, liquidators receiving collateral discounts, and market curators receiving a portion of pool treasury income. This metric is utilized to evaluate the economic incentives provided to the supply-side participants who secure and fund the protocol. Values are normalized to USD using end-of-day price feeds.

## 2. Data sources

- **Blockchain events**: `Repay` events from `Pool` and `PoolV3` contracts, `LiquidateCreditAccount` and `OpenCreditAccount` events from `CreditManager` and `CreditFacade` contracts, and `LiquidateCreditAccount` and `PartiallyLiquidateCreditAccount` events from `CreditFacadeV3` contracts, covering Ethereum, Monad, and Plasma
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Interest and quota fee accrual

- **Purpose**: Calculate interest and quota fees earned by liquidity providers.
- **Logic**: For Gearbox V3, daily interest is calculated by multiplying the total borrowed amount by the change in the base interest index between consecutive reads. Quota fees are calculated by annualizing the quota revenue and multiplying by the days elapsed since the previous read. For Gearbox V1, interest is calculated using the total borrowed amount, the borrow APY, and the time elapsed. For chains with pruned historical state (such as Monad), interest is estimated from repaid profits and interest markups prior to the first available daily reads. Certain pools identified as inactive or dead are excluded from the accrual calculations.
- **Key fields**: `total_borrowed`, `base_interest_index`, `quota_revenue`, `borrow_apy_ray`

### Component B: Liquidator premium extraction

- **Purpose**: Calculate the discount or premium earned by liquidators during liquidations.
- **Logic**: For Gearbox V1 and Gearbox V2, the liquidator's discount is calculated from the remaining funds on `LiquidateCreditAccount` events and the profit on `Repay` events, where a fixed discount rate of 5% for V1 and 4% for V2 is applied. For Gearbox V3, the premium is calculated from `LiquidateCreditAccount` and `PartiallyLiquidateCreditAccount` events, where either the actual charged discount rate or a fallback rate from the credit manager configuration is applied to the total funds paid.
- **Key fields**: `remaining_funds`, `profit`, `repaid_debt`, `fee`

### Component C: Curator treasury share allocation

- **Purpose**: Determine the portion of treasury income allocated to market curators.
- **Logic**: Treasury income (consisting of interest markups and protocol liquidation fees) is split between the protocol and market curators. The curator's share is calculated by multiplying the treasury income by the curator's share percentage (which is 100% for curator-owned Gearbox V3.0 pools, and determined by on-chain split parameters for Gearbox V3.1 pools). For Gearbox V3.1 pools, a default protocol share of 50% is applied if the on-chain split has not yet been read.
- **Key fields**: `protocol_share`, `markup`, `protocol_fee`

### Component D: USD conversion and aggregation

- **Purpose**: Normalize all supply-side fee components to USD and aggregate them.
- **Logic**: All calculated fee components (lender interest, quota fees, liquidator premiums, and curator treasury shares) are summed. The native asset amounts are normalized by decimal precision and multiplied by end-of-day asset prices to convert them to USD. The final values are aggregated daily.
- **Key fields**: `fees_supply_side`, `price_usd`

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

Portion of fees distributed to service providers or supply-side participants.

GearboxGEAR

Supply-side fees

Supply-side fees

Competitive landscape

Chain breakdown