Are you an LLM? Read llms.txt for a summary of the docs, or llms-full.txt for the full context.
Skip to content

Tokenized-asset markets

A tokenized asset can be used in an EVK market only with assumptions about valuation, transferability, liquidity, governance, and legal rights. Euler provides lending and collateral infrastructure; it does not issue, sponsor, value, redeem, distribute, or determine eligibility for the underlying asset.

External dependencies

Assess and document:

  • issuer, custodian, administrator, and transfer-agent responsibilities;
  • holder and redemption rights and the legal process for enforcing them;
  • eligibility, transfer restrictions, freezes, blacklists, and clawbacks;
  • default, insolvency, impairment, and dispute scenarios;
  • trading calendars, settlement timing, redemption gates, fees, and minimums;
  • NAV or reference-price publication, staleness, corrections, and market-price divergence; and
  • jurisdiction, disclosure, data, and operational requirements.

A token contract, hook, oracle, or metadata label does not establish those offchain facts.

Valuation and realizability

Configure the liability vault's oracle route for the intended unit of account and stress both stale and unavailable sources. If an ERC-4626 share is resolved through convertToAssets, assess manipulation, decimals, recursion, redemption liquidity, gates, fees, slippage, user restrictions, and whether the quoted assets can actually be realized during liquidation. A stable NAV or conversion quote does not guarantee executable liquidity.

Transfer and liquidation design

Hooks can cover configured vault operations or vault-share transfers. They do not replace issuer/token-level restrictions or offchain eligibility processes. Document which actors and actions are checked, including deposits, borrows, EVC batches, sub-accounts, transfers, repayments, withdrawals, and liquidations.

Define eligible liquidators and test what happens when collateral is seized but cannot transfer, trade, settle, or redeem. Include provider outages, revocation, freezes, closed trading days, stale valuation, and delayed settlement.

Exposure boundaries

Isolating a tokenized asset in a separate market can reduce direct exposure, but dependencies can remain through collateral relationships, shared liability or collateral vaults, oracle/router governance, liquidity, hooks, applications, and integrators. Review the complete relationship graph rather than relying on an “isolated” label.

Caps, LTVs, liquidation settings, and IRMs can limit configured exposure; they cannot eliminate issuer, valuation, liquidity, governance, or legal risk.

Build flow

  1. Establish asset rights, restrictions, providers, and failure assumptions.
  2. Configure and test oracle routes.
  3. Implement only the required hook checks and map their exact operation coverage.
  4. Set caps, LTVs, liquidation parameters, and interest-rate behavior against stressed liquidity and valuation scenarios.
  5. Assign and verify governance controls.
  6. Test transfer, redemption, liquidation, default, outage, and emergency scenarios.
  7. Publish factual labels and metadata.

Read next