Key points
- Euler v2 introduces a modular approach to DeFi, allowing for a wide range of lending and borrowing options.
- The platform’s use of ERC4626 vaults enables innovative collateral and liquidity solutions.
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Euler Finance, a DeFi platform built on the Ethereum blockchain, today announced that it has officially launched Euler v2, introducing advanced features such as a modular design and enhanced lending capabilities.
Modularity and flexibility have become essential to overcome liquidity fragmentation and high borrowing costs in DeFi lending.
Modular lending solutions, such as Euler v2, aim to make DeFi lending more efficient and user-friendly by enabling the permissionless creation of vaults that can connect to and use other vaults as collateral.
“Euler v2 represents a turning point not just for us, but for the entire DeFi ecosystem. With Euler v2’s modular design, we are redefining the possibilities of on-chain credit, allowing users to build, borrow, and lend with a new level of flexibility and capital efficiency. This launch is a catalyst for the next wave of DeFi growth,” said Michael Bentley, Co-Founder and CEO of Euler Labs.
Euler said its version 2 allows developers to create highly customizable lending and borrowing vaults. This flexibility removes limitations and makes it easier to create new financial products.
According to Euler, two key components of the new protocol are the Euler Vault Kit (EVK) and the Ethereum Vault Connector (EVC).
The EVK facilitates the deployment of ERC4626 vaults, allowing developers to create and customize their own permissionless lending vaults. The kit supports multiple classes of vaults, including escrowed vaults, gated and ungated vaults, and yield aggregation vaults.
These vaults can accommodate a variety of governance and risk management styles, and support everything from native cryptocurrency tokens to real-world assets, Euler noted.
Meanwhile, EVC enhances the capabilities of vaults, allowing them to be used as collateral for other vaults, thus creating a more interconnected lending ecosystem.
Euler said this modular architecture not only supports traditional lending and borrowing but also the creation of synthetic assets and collateralized debt positions.
Euler v2 also comes with advanced risk management tools designed to provide a comprehensive and user-friendly experience, while significantly reducing settlement costs compared to v1.
With the new launch, Euler aims to eliminate the fragmentation seen in traditional DeFi lending markets.
The company expects Euler v2 to open up new opportunities for both experienced DeFi users and new institutional participants. The goal is to enable users to create, connect, and optimize vaults to fit any strategy or need.
The launch of Euler v2 also marks Euler Finance’s strong comeback after a $200 million exploit last year. The firm envisions its v2 going beyond a lending protocol, acting as a meta-lending platform that lays the groundwork for on-chain lending in DeFi.
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