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Considerations for liquidity providers and curators

Providing liquidity through EulerSwap combines an AMM position with Euler supply positions and, when enabled, borrowing. LPs can configure the pool for a particular pair and strategy, but should monitor both its market-making exposure and the connected lending positions.

Configure the pool

Equilibrium reserves, minimum reserves, directional prices, concentration, and fees shape quotes and inventory changes in each direction. Review both directions under a range of trade sizes before launch.

These settings are dynamic in EulerSwap 2. An authorized owner or manager can update them with reconfigure; changing equilibrium or fees does not generally require reinstalling the pool. A new installation is needed when fixed StaticParams must change.

Lower concentration does not always mean lower risk, and rebalancing does not guarantee a neutral position. Either change can affect depth, price impact, inventory, debt, slippage, liquidation exposure, and realized loss.

Monitor inventory and debt

Track supplied inventory and debt separately for each asset, especially when the supply and borrow vaults differ. Output uses supplied inventory first and borrows only an optional shortfall. Incoming input repays enabled debt for that asset before any remainder is supplied.

Monitor:

  • reserves, prices, concentration, fees, and expiration;
  • manager permissions and hook configuration;
  • supplied balances and debt for both assets;
  • vault utilization, rates, caps, and available liquidity;
  • oracle routes and account health; and
  • quotes and execution bounds in both swap directions.

LTV and liquidation

LTV is configured in the lending relationship between connected vaults, not in the EulerSwap curve. Borrowing can increase available swap liquidity, but it also adds interest costs and liquidation exposure. A pool may be unable to borrow when liquidity, caps, LTVs, oracle values, or final solvency checks do not permit it.

Maintenance

Quotes can become stale after a pool reconfiguration, inventory change, interest accrual, vault or oracle update, or hook execution. Re-read state before transactions and allow for failed or delayed monitoring and execution.

Fee income, lending interest, and rewards should be tracked separately from inventory changes, borrowing costs, and realized losses. Their availability and value depend on activity and external conditions.

For operating instructions, verify that any interface or guide targets the same EulerSwap generation and deployed pool. Do not apply instructions from another interface or EulerSwap generation.