Author

desnake

Summary

This proposal outlines the next steps in transitioning away from the older Gearbox v3.0 markets on Arbitrum, Optimism, and Sonic. As well as completing the additional deprecation steps on Ethereum mainnet: forbid creation of new exposure, set IRMs to those were used before softer curves were introduced in [GIP-264]

The proposal introduces a set of updates that will help responsibly wind down the remaining v3.0 markets on L2s.

The active wind-down applies only to Credit Account holders in the legacy v3.0 markets on Arbitrum, Optimism, and Sonic. The goal is solely to reduce the remaining approximately $56k of outstanding debt in these markets to zero so they can be cleanly sunset.

Liquidity Providers (LPs) are not required to take any action and may withdraw their liquidity at any time.

To make this transition smoother for borrowers, liquidation premiums and fees are reduced by more than 5×, minimizing potential losses for users who may not close their Credit Accounts before the expiration date.

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Motivation

Gearbox has evolved significantly with the rollout of the permissionless v3.1 architecture, which simplifies operations and allows anyone to deploy and manage new markets without relying on DAO resources. In contrast, the older v3.0 markets on L2s currently have very low usage but still consume considerable infrastructure and contributor time, such as maintaining RPC connections, running security monitoring, and keeping two protocol versions active simultaneously.

Continuing to support these legacy markets creates unnecessary overhead and makes it harder to focus on the more efficient and scalable v3.1 system. As part of a broader plan to streamline the protocol, this proposal introduces a structured process that allows the DAO to gradually sunset the unutilized v3.0 markets.

The intention is to reduce operating costs, simplify the system for users and contributors, and guide the ecosystem toward a fully permissionless architecture while ensuring that the remaining active users in these legacy markets experience a thoughtful and well-managed transition.

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Specification

Arbitrum

Expiration

Set expiration for all CMs with active positions to: 1764928800 (Dec 5th, 2025)

Liquidation Premium Parameters

Update the following liquidation fees to 0.01%:

• Trade WETH Tier 1
• Trade USDC Tier 2
• Trade WETH Tier 2
• Trade USDC.e Tier 1

Updated liquidation premiums:

• Trade WETH Tier 1: 1%
• Trade USDC Tier 2: 1%
• Trade WETH Tier 2: 1.1%
• Trade USDC.e Tier 1: 4%

Other CMs remain unchanged due to zero debt.

Adapter Updates

Trade WETH Tier 1 & Tier 2 Add Uniswap V3 pools:

• cbETH/WETH 0.05%
• cbETH/WETH 0.01%
• rETH/WETH 0.05%
• rETH/WETH 0.01%

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Optimism

Expiration

Set expiration for CMs with active positions to: 1764928800 (Dec 5th, 2025)

Liquidation Premium Parameters

Update the liquidation fee to 0.01% for:

• Trade WETH Tier 2

Updated liquidation premium:

• Trade WETH Tier 2: 1%

Other CMs unchanged due to zero debt.

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Sonic

Expiration

Set expiration for CMs with active positions to: 1764928800 (Dec 5th, 2025)

Liquidation Premium Parameters

Update the liquidation fee to 0.01% for:

• wS Correlated Tier 2

Updated liquidation premium:

• wS Correlated Tier 2: 1%

Other CMs unchanged due to zero debt.

Ethereum Mainnet

Set Debt Limits

Set debt limit = 0 for all remaining v3.0 pools.

Adapter Updates

Restaking WETH CM Add:

• rsETH/wstETH 0.05% (Uniswap V3)

IRMs update

ETH & WBTC pools

There are less problems mentioned above in WETH/WBTC pools, but it's also proposed to decrease max rates to values sufficient for making borrowers decrease positions in a more gentle way. | Parameter | Proposed value | | --------- | -------------- | | r0 | 0 | | r1 | 1 | | r2 | 1.5 | | r3 | 20 | | U1 | 70 | | U2 | 90 | | isBorrowingMoreU2Forbidden | true |

Stablecoin pools

The proposed IRM to be deployed and set for USDC, USDT, DAI, GHO & crvUSD pools is as follows: | Parameter | Proposed value | | --------- | -------------- | | r0 | 0 | | r1 | 2 | | r2 | 5 | | r3 | 23 | | U1 | 70 | | U2 | 90 | | isBorrowingMoreU2Forbidden | true |

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Additional Notes

• Liquidation-related parameters are adjusted to make the transition more user-friendly and reduce potential losses for users who do not manually close positions.
• Current liquidity conditions allow these adjustments to be executed safely.
• If needed, a follow-up proposal may request DAO subsidies to complete remaining liquidations responsibly.

Txs log

Txs log can be found here

Md5 checksums are:

Mainnet 3dcd63fa27cd51942ae1cacb6fe11926 4b3b0c0bf4a86e0c208afc71ea4db76a

Arbitrum 4efba7f8443b716298036930941041b3

Optimism 8788f11bdf06853bdc5a77a202356ad7

Sonic 99bbb78bc023744a065ecfda7a3cbdcc