Euler’s protocol is designed to increase capital efficiency while providing innovative risk management solutions
December 13, 2021 — Euler, a non-custodial lending protocol built on Ethereum, has announced its mainnet launch to allow users to lend and borrow almost any crypto asset. The platform offers a first-of-its kind risk management framework that makes permissionless lending and borrowing more secure than ever before.
Euler was created to provide secure lending and borrowing services while allowing anyone to create their own lending markets. Currently, most first-generation DeFi lending protocols are not designed to handle the unique risks associated with illiquid or volatile assets, and have therefore relied on permissioned listing systems. To tackle these limitations, Euler has developed novel risk management tools specifically designed for a permissionless platform, addressing the unmet demand for lending and borrowing a wider range of crypto assets.
“Euler’s protocol offers improved security and capital efficiency for DeFi lenders and borrowers when compared to existing systems,” said Michael Bentley, CEO of Euler. “We’re excited to help unlock the value of the broader crypto ecosystem and pave the way in making decentralized finance more mainstream.”
Uniquely, Euler leverages a permissionless market activation model in which the protocol’s stakeholders can determine which assets are listed. Any asset traded on popular decentralised exchange Uniswap can be made available by stakeholders for lending and borrowing on Euler. As borrowing is collateralised with high quality assets, and many of the more volatile assets can only be borrowed in an isolated mode, lenders are exposed to minimal bad debt risk. At the same time, borrowers are also exposed to reduced risk through a unique set of tools that help limit the potential for miners to extract value from the protocol during liquidations. The combined impact of these modules results in greater capital efficiency than alternative models.
In light of recent attacks on other lending protocols, Euler’s mainnet deployment has been designed with security at the forefront. The platform will initially support a limited number of collateral assets as users begin to experiment with the protocol and deliver feedback. EUL stakeholders will then be able to petition governance for new collateral assets to be added in the new year.
“The Euler protocol was designed with security and risk management at the forefront,” said Bentley. “We are committed to protecting our users and building long-term trust.”
Euler was incubated by Encode Club, a community of researchers based at universities including Oxford and Cambridge. After its founders won an Encode hackathon, it began to develop into a full protocol. Since then, Euler has raised $8 million in a Series A funding round, led by venture capital firm Paradigm, in addition to closing an $800,000 seed round last December. Euler will be launching an EUL token distribution plan in early Q1 2022 in an effort to decentralise its protocol.
To learn more about Euler, visit: https://www.euler.finance/#/