Skip to main content

Overview

Euler Earn is an open-source protocol for permissionless risk curation and yield aggregation on top of ERC-4626 vaults. It is designed to make passive yield accessible to everyone, while allowing risk curators to manage and optimize yield strategies on behalf of depositors. The protocol is built to be modular, secure, and easy to integrate with the broader DeFi ecosystem.

Why Euler Earn?

In Euler V2, lending vaults can be highly customizable, but this flexibility can be overwhelming for passive users. Euler Earn solves this by letting risk curators (DAOs, protocols, or individuals) deploy meta-vaults that aggregate yield from multiple strategies, manage risk, and simplify the user experience. Users simply deposit assets and earn yield, while curators handle the complexity of strategy selection and risk management.

Core Concepts

  • Strategies: Each Earn vault can allocate assets across multiple ERC-4626-compliant strategies (including Euler V2 lending vaults, Yearn, Morpho Vaults, and more). The strategy at address zero acts as a cash reserve for instant withdrawals.

  • Allocation Points: Each strategy is assigned allocation points, determining how much of the vault's assets are allocated to it during rebalancing.

  • Rebalancing: Curators with the Rebalancer role can move assets between strategies to maintain target allocations and optimize yield.

  • Harvesting & Yield Smearing: Yield is harvested from strategies and distributed to depositors over a configurable smearing period rather than instantly. This design choice serves multiple purposes: it smooths out exchange rate fluctuations, provides an alternative approach to MEV protection without requiring expensive per-transaction validations across all strategies, and creates more predictable returns for passive users. The trade-off is that withdrawal timing affects yield received—users withdrawing during the smearing period may receive less accrued interest than if yield were distributed immediately, while remaining depositors benefit from the deferred yield. This isn't a fee but rather a timing-based yield distribution mechanism that vault creators can configure based on their target user base and expected usage patterns.

  • Performance Fees: Vault managers can set a performance fee (up to 50%) on net positive yield, which is minted as vault shares to the fee recipient.

  • Loss Deduction: If a strategy incurs a loss, it is first deducted from unaccrued interest, and any remaining loss is socialized across all depositors.

  • Withdrawal Queue: Withdrawals are processed from the cash reserve first, then from strategies in a prioritized queue, minimizing slippage and gas costs.

  • Roles & Governance: Access control is granular, with roles for strategy management, rebalancing, fee setting, and emergency actions. Key roles include:

    • Default Admin: Assigns or revokes other roles, ensuring proper governance.
    • Strategy Operator: Adds or removes strategies, allowing curators to adapt to market conditions.
    • Guardian: Sets strategies to emergency status or pauses operations, acting as a circuit breaker.
    • Rebalancer: Moves assets between strategies to maintain target allocations and optimize yield.
    • Withdrawal Queue Manager: Reorders the withdrawal queue for efficient withdrawals.
    • Euler Earn Manager: Sets performance fees and fee recipients, and manages reward streams.

    Each role (except DEFAULT_ADMIN_ROLE) has a corresponding admin role (e.g., GUARDIAN_ADMIN) that can assign or revoke that specific role. This allows for secure delegation and separation of duties while maintaining granular control over role management. These roles are essential for active management and risk curation, ensuring the vault can adapt to changing conditions and protect depositor interests.

  • Circuit Breakers: Emergency modes can be activated for individual strategies, allowing curators to quickly isolate or pause problematic strategies without affecting the entire vault.

  • Native Governance Integration: Earn vaults natively support ERC20Votes, enabling on-chain governance and voting by vault share holders.

  • Immutability & Security: Core contracts are immutable, but Earn vaults are designed to be actively managed by risk curators. Revoking all roles disables management and is generally not recommended. The protocol's security comes from robust role-based access control and transparent governance, not from making vaults immutable.

For a full technical reference, see the Euler Earn whitepaper or the Euler Earn repository.