Altcoin Arena: Euler

What Is Euler?

1. What Is Euler?

Euler Finance (governance token EUL) is a decentralized, non-custodial lending and borrowing protocol built on the Ethereum blockchain. It enables users to lend, borrow and create markets for a wide range of crypto assets (including long-tail tokens) in a permissionless manner. :contentReference[oaicite:3]{index=3}

2. Why Euler Was Created

The DeFi ecosystem previously limited lending/borrowing markets to a narrow set of assets, requiring governance approval for listings. Euler was created to overcome these limitations by:

• Allowing any ERC-20 token with a WETH trading pair to be listed for lending or borrowing without prior permission. :contentReference[oaicite:4]{index=4}
• Introducing a risk-tiering model (Isolation-tier, Cross-tier, Collateral-tier) to enable more assets while managing risk. :contentReference[oaicite:5]{index=5}
• Enabling higher capital efficiency and modular vault architecture for advanced strategies and product innovation. :contentReference[oaicite:6]{index=6}

3. How Euler Works

1. A user deposits an asset into Euler’s protocol, making it available for lending. :contentReference[oaicite:7]{index=7}
2. The user can then borrow another asset, subject to collateral and risk-tier rules defined by the protocol. :contentReference[oaicite:8]{index=8}
3. The protocol classifies assets into tiers (Isolation, Cross, Collateral) which determine borrow/collateral usage and risk parameters. :contentReference[oaicite:9]{index=9}
4. Euler v2 (the next generation) allows developers to create customised lending vaults using the Euler Vault Kit (EVK) or use assets/vaults as collateral via the Ethereum Vault Connector (EVC). :contentReference[oaicite:10]{index=10}
5. Holders of EUL tokens participate in governance, vote on protocol changes, treasury proposals and may be rewarded from protocol fee flows. :contentReference[oaicite:11]{index=11}

4. Key Features of Euler

• Permissionless asset listing: virtually any ERC-20 with a WETH pair can be listed. :contentReference[oaicite:12]{index=12}
• Modular architecture: supports custom vaults, composable credit markets and flexible collateral strategies. :contentReference[oaicite:13]{index=13}
• Risk-tiering model to enable more assets while managing system vulnerability. :contentReference[oaicite:14]{index=14}
• Governance token (EUL) that enables proposals, voting and participation in protocol fee flows or rewards. :contentReference[oaicite:15]{index=15}
• Recovery and resilience: after a major exploit in v1 (≈$200 m), the protocol is relaunching with v2 improvements. :contentReference[oaicite:16]{index=16}

5. Who Can Use Euler?

• Crypto holders who want to deposit assets and earn yield by lending. :contentReference[oaicite:17]{index=17}
• Borrowers seeking access to a wide range of assets, including less-common tokens, with leverage based on collateral tiers. :contentReference[oaicite:18]{index=18}
• DeFi developers and teams who want to create customised vaults and credit markets using Euler’s modular infrastructure. :contentReference[oaicite:19]{index=19}
• Token holders and ecosystem participants who wish to engage in governance, staking or benefit from protocol growth. :contentReference[oaicite:20]{index=20}

6. What Is the $EUL Token?

The native governance token of the protocol, $EUL, underpins Euler’s ecosystem. :contentReference[oaicite:21]{index=21}

• Governance: EUL holders can vote on protocol parameter changes, asset-listing rules and treasury allocation. :contentReference[oaicite:22]{index=22}
• Fee flow & rewards: EUL is used in auction mechanisms to distribute protocol fees and to reward users. :contentReference[oaicite:23]{index=23}
• Supply & allocation: Total supply is 27,182,818 EUL tokens. :contentReference[oaicite:24]{index=24}
• Utility alignment: Token value aligns with protocol adoption, vault usage, asset listings and governance activity. :contentReference[oaicite:25]{index=25}