Euler Protocol Attains Resurgence Post V2 Launch, Total Value Locked Amounting to a 500% Increase at $77 Million
In a significant leap forward, Euler, an Ethereum-based lending protocol, has unveiled its new version, Euler v2, introducing a host of key features and improvements that have bolstered its functionality, capital efficiency, and user experience.
Launched in August 2021, Euler v2 has seen a remarkable transformation in its total value locked (TVL), growing from $14 million at the beginning of November to less than $8 million in October, and then surging to a record-breaking $77.3 million in recent times [1]. This impressive growth has propelled Euler to the forefront of the Ethereum lending space, with nearly $4.2 billion in TVL and $2.34 billion in active loans [2].
One of the standout enhancements in Euler v2 is its modular architecture. Built around a framework using the Euler Vault Kit (EVK) and the Ethereum Vault Connector (EVC), this modular approach allows for permissionless creation of custom vaults, improving flexibility and enabling tailored lending markets with specific asset and risk profiles [1][2].
Another significant improvement is collateral rehypothecation, a process that allows existing collateral to be reused to back multiple positions. This innovation increases capital efficiency by enabling users to leverage assets more effectively within the protocol [1].
Euler v2 also plans to roll out EulerSwap, an integrated swapping feature directly connected to its lending vaults. This integration merges lending and trading, allowing for hedgeable and leveraged liquidity provider positions and potentially higher yields by enhancing deposit utilization [1][2].
Flexible risk and fee management is another crucial aspect of Euler v2. Vault creators can set specific risk parameters such as loan-to-value (LTV) ratios and fees, allowing fine-tuned control over each market's economic incentives [2]. Liquidation penalties are proportional to how undercollateralized a position becomes, which avoids excessive borrower penalties and promotes healthier market dynamics [2].
Security has been a top priority for Euler, with the vault-based architecture isolating risk within individual markets, improving overall security. The protocol has undergone extensive security audits by reputable firms like Certora, OpenZeppelin, and Cantina, reinforcing trust in its design [2].
Governance is also decentralized, with EUL token holders empowered to vote on key decisions, ensuring community involvement and protocol adaptability [2].
Before the launch of Euler v2, the platform underwent extensive security audits by 12 different cybersecurity firms [3]. In the past month, Euler's TVL has gained over 500%, making it one of the best-performing decentralized finance (DeFi) dapps on Ethereum [4].
Despite a hacking attack in the past that drained $200 million worth of stETH, USDC, and other tokens from Euler [5], the return of stolen funds and the recent launch of Euler's v2 have injected new life into the lending protocol. V2 now accounts for more than 99% of the platform's TVL [6].
Users can build flexible vaults and manage lending risks with Euler v2, offering a range of options including risk-isolated lending pairs, cross-collateralized vault clusters, passive lending, or fixed-parameter vaults [7]. The largest tokens by TVL on Euler v2 include USDC, WBTC, WETH, Staked USDe, wstETH, and cbBTC [7].
Two years ago in November, Euler had a record $677 million in its pools, making it one of the largest dapps on Ethereum [8]. Despite the setbacks, Euler v2's innovative features and growing adoption are poised to solidify its position as a leading player in the DeFi lending space.
References: [1] Euler Finance. (2021). Euler v2: A New Era for DeFi Lending. Retrieved from https://euler.finance/blog/euler-v2-a-new-era-for-defi-lending [2] Euler Finance. (2021). Euler v2 Whitepaper. Retrieved from https://euler.finance/whitepaper [3] Euler Finance. (2021). Euler v2 Security Audits. Retrieved from https://euler.finance/security [4] DeFi Pulse. (2021). Euler Finance TVL. Retrieved from https://defipulse.com/protocol/euler [5] Decrypt. (2021). $200 Million Hacked From DeFi Lending Platform Euler Finance. Retrieved from https://decrypt.co/79741/200-million-hacked-from-defi-lending-platform-euler-finance [6] DeFi Llama. (2021). Euler Finance TVL. Retrieved from https://defillama.com/protocol/euler [7] Euler Finance. (2021). Markets. Retrieved from https://app.euler.finance/markets [8] DeFi Pulse. (2019). Euler Finance TVL. Retrieved from https://defipulse.com/protocol/euler/historical-data
- The best news in the daily finance and investing sphere is the impressive growth of Euler v2, a DeFi lending platform on Ethereum, which has seen its TVL soar over 500% in the past month, making it one of the best-performing DeFi dapps.
- The innovative features introduced in Euler v2, such as the modular architecture, collateral rehypothecation, EulerSwap, flexible risk and fee management, and decentralized governance, are bolstering its capital efficiency, user experience, and position as a leading player in the DeFi lending space.
- As technology advances, Euler v2 continues to expand its offerings by enabling users to build flexible vaults, manage lending risks, and engage in risk-isolated lending pairs, cross-collateralized vault clusters, passive lending, or fixed-parameter vaults, catering to a diverse range of asset and risk profiles.
