Gearbox Protocol offers composable leverage and a user-friendly interface, allowing users to benefit from some high APRs on deposited tokens across a range of strategies. There are also options to deposit to passive pools and earn rewards, and to unlock liquidity, users can utilize holdings as collateral against which to borrow in a range of crypto assets, including various stablecoins.
Trading is risky, so for balance you might want to allocate some of your portfolio to passive yield strategies, and there are some very juicy APRs currently available at Gearbox Protocol, with the highest returns accessed through leveraging your positions.
This kind of strategy comes with other risks of its own though, so be aware that you’re exposed to the possibility of liquidation, smart contract exploits, stablecoin depegs, frontend attacks, and systemic risks across DeFi and crypto. This guide is neither financial advice nor an endorsement of the protocol, and please make sure to check Gearbox’s official documents for full details of the risks involved.
What Is Gearbox Protocol?
Gearbox Protocol is all about composable leverage and aims, in its own words, to deliver “a seamless, all-in-one prime brokerage experience”. This means it uses account abstraction to be as user-friendly as possible, it works across multiple ecosystems, and–the part we’ll mainly focus on here–it lets users access on-chain credit to increase position sizes and earn more yield.
Leveraged Yield Farming on Gearbox Protocol
The highest returns you can find right now on Gearbox are in the leveraged farming section, but from the start, be aware that the minimum amounts required to use this function can be high.
To access farming, open the app and click on the Farm tab up at the top, and you’ll then get a list of strategies using various other protocols, with the types of rewards listed for each, along with the maximum available leverage.
If you’re looking to avoid token volatility and earn on stablecoins, then click on the Stables tab above the list of strategies to get a view of stablecoin options only. Gearbox does the hard work for you here, so it’s a case of selecting a strategy and clicking through to deposit, which in the process will open a Credit Account for you.
If you scroll down through the various strategies on offer, you can see for example, that the Ether.fi eBTC farm has a long list of multiplied points rewards on offer–including Ether.fi points and Babylon points–while further down the list, the Pendle sUSDe PT option doesn’t offer points, but it currently has a very solid 46.77% APR.
Choosing a strategy all comes down to the individual user–you might prioritize earning a range of points, you may simply want to pick up the most profitable APR, or there might be particular protocols that you prefer to make use of.
As an example though, let’s click on the Pendle sUSDe PT farm. This then tells you the token that you’re depositing into at the top–in this case it’s a specific Pendle PT token (and to read about another strategy using Pendle, please check this earlier guide), along with further details.
Note also that Gearbox advises here that “some farms’ APYs fluctuate a lot and can take up to a month to reach their true average”, so keep that time frame in mind when allocating…
