Summary
This proposal seeks to introduce GearboxFed, a governance-controlled Fed contract designed to manage DOLA supply by integrating with the Gearbox DOLA vault. Leveraging the standardized ERC4626 interface, GearboxFed provides a modular approach for depositing into and withdrawing from the Gearbox vault, enabling efficient liquidity management while remaining adaptable to future changes.
Motivation
GearboxFed is developed to streamline DOLA supply management specifically for the Gearbox platform. By employing a unified ERC4626-based strategy, the Fed reduces operational complexity and enhances liquidity efficiency. This approach enables controlled expansions and contractions of the DOLA supply under the supervision of the Fed Chair (delegated by governance), ensuring that the system remains responsive to market conditions and potential liquidity issues.
Design & Key Functions
GearboxFed expands the DOLA supply by minting tokens directly into the contract and depositing them into the Gearbox DOLA vault. Withdrawals contract the supply by redeeming tokens from the vault and burning them, with functions such as previewWithdraw and previewRedeem ensuring accurate calculations in the presence of fees or rounding discrepancies. A repayDebt mechanism allows external contributions to offset potential losses, thereby maintaining accurate Fed accounting. In emergency situations, a sweep function empowers governance to recover tokens—including vault tokens—thus mitigating risks associated with misbehaving contracts.
Risk Considerations
The design takes into account potential limitations within the Gearbox DOLA vault, including maximum deposit or withdrawal limits and possible rounding discrepancies. To mitigate these risks, GearboxFed is programmed to revert transactions if discrepancies exceed acceptable thresholds, ensuring that deviations do not compromise protocol integrity. Emergency functions and debt repayment mechanisms provide additional layers of protection, while standard governance timelocks and multi-signature controls further minimize risk exposure.
The Risk Working Group (RWG) has covered additional considerations, as well as recommendations for SupplyCap, in a dedicated Gearbox Fed Risk Assessment.
Next Steps & Implementation
Upon approval, GearboxFed will be officially recognized as the ERC4626-based DOLA Fed for the Gearbox platform within the Inverse Finance ecosystem. Ongoing maintenance and periodic risk assessments will ensure continued adherence to high security and performance standards. This proposal represents a strategic initiative for versatile and resilient DOLA supply management within the Gearbox ecosystem.
On-Chain Actions
- Add minter on DOLA contract, assign Gearbox Fed
- setSupplyCap on Gearbox Fed to 3,000,000 DOLA