Rewards

Euler offers a sophisticated rewards system that incentivizes participation in its vaults through both on-chain and off-chain mechanisms. These rewards are designed to provide additional value to participants, all while maintaining the protocol's efficiency and security.

On-Chain Reward Streams

At the heart of Euler's on-chain rewards system is the innovative Reward Streams module. This open-source solution represents a significant advancement in how DeFi protocols can distribute incentives. What makes it particularly interesting is its implementation of the billion-dollar algorithm, which enables the simultaneous distribution of multiple reward tokens in a permissionless and trustless manner.

The beauty of Reward Streams lies in its flexibility and user-centric design. Unlike traditional staking mechanisms that require users to lock their assets in separate contracts, Reward Streams allows users to subscribe to their preferred rewards while maintaining full control of their positions. This means you can earn rewards while simultaneously taking out loans, creating a more dynamic and efficient way to participate in the protocol.

Off-Chain Merkl Integration

Complementing the on-chain rewards, Euler has integrated with Merkl to provide off-chain reward distribution. This integration offers a different approach to incentivizing participation, with campaigns that can target specific activities such as supplying assets, borrowing, or borrowing against particular collateral types.

The Merkl system updates accumulated rewards approximately every 8-12 hours. What's particularly convenient is that these rewards can be claimed either through the Euler app or directly on the Merkl Dashboard, giving users flexibility in how they manage their rewards.

How Rewards Work in Practice

When you supply or borrow from Euler vaults, if there's an active campaign, you're automatically eligible for Merkl rewards. These off-chain rewards are seamlessly integrated into your normal protocol interactions, requiring no additional steps to start earning.

For Reward Streams, you'll need to actively opt-in to start receiving on-chain rewards. This opt-in process allows you to choose which reward streams you want to participate in, giving you control over your reward strategy.

The rewards you earn can come from various sources and can be distributed in different tokens, depending on the specific campaigns and incentives active at any given time. This multi-token approach allows for a diverse range of incentives that can be tailored to different user preferences and market conditions.

Maximizing Your Rewards

To make the most of Euler's rewards system, it's important to understand how the different mechanisms work together. On-chain rewards through Reward Streams provide immediate, transparent distribution of incentives, while Merkl's off-chain rewards offer additional opportunities for earning through targeted campaigns.

The key advantage of this dual approach is that it allows for more sophisticated reward strategies. Projects can choose the most appropriate method for their specific needs, whether that's the immediate, on-chain distribution of Reward Streams or the more flexible, campaign-based approach of Merkl.