Risk Management

Vaults on Euler are either governed or ungoverned. Ungoverned vaults are considered fully immutable as their parameters will stay fixed forever, and once removed, governance cannot be added at a later time.

On the other hand, governed vaults allow a privileged account to modify the parameters of the vault in response to market dynamics. The most common risk actions are changing the loan-to-value ratio (LTV) of the vault and modifying the supply and borrow caps.

Security

The governor is a highly sensitive role that can exert direct control over a vault's balances. This is why governed vaults do not appear in the Euler App by default. Instead, governors must pass a vetting process conducted by Euler Labs, which includes having a multisig with a timelock installed.