Euler Finance, an ethereum-based protocol, has unveiled its latest version, Euler v2, following a $240 million exploit in March 2023. The new iteration of Euler aims to revolutionize on-chain credit and lending within the DeFi space. With the release of Euler v2, the protocol introduces a meta-lending framework that supports a wide range of on-chain credit use cases for both DeFi users and institutional players.
The team behind Euler v2 emphasizes the protocol's ability to enable the creation of vaults that can collateralize various digital assets, paving the way for innovative solutions in the DeFi landscape. By offering a platform for limitless on-chain credit use cases, Euler v2 seeks to eliminate fragmentation and inefficiencies present in traditional lending markets.
Four Types of Customizable Vaults
Euler v2 allows builders and institutions to design and deploy custom credit products through highly adaptable borrowing and lending vaults. These vaults can be tailored to suit specific strategies and requirements, offering a wide range of possibilities for users. From passive yield aggregators to sophisticated lending and borrowing systems, Euler v2 provides flexibility and control over governance, risk management, and asset pricing.
At launch, the supported vaults include ungoverned escrowed collateral vaults, governed vaults, ungoverned vaults, and yield aggregator vaults. Each type of vault caters to different user needs and preferences, offering diverse options for interacting with the Euler protocol.
‘Unique Feature’: Recognizing Deposits in Any Ecosystem Vault
A standout feature of Euler v2 is the ability for vault creators to seamlessly deploy new vaults within the Euler ecosystem using the Euler Vault Kit (EVK) and connect them to existing vaults via the ethereum Vault Connector (EVC). This unique feature enables new vaults to recognize deposits from other vaults as collateral, fostering liquidity across the ecosystem.
The team at Euler sees this feature as a powerful mechanism for boosting liquidity in both new and existing vaults. By allowing deposits in older vaults to gain utility in newer ones and vice versa, Euler v2 aims to create a cohesive ecosystem where users can seamlessly interact with different vaults.
Furthermore, with the shift to Euler v2, users can explore new risk/reward opportunities for lending and borrowing assets of their choice. Whether opting for actively managed governance or governance-free vaults, users now have a range of options to engage with diverse asset classes and risk profiles within the Euler ecosystem.
