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Euler Earn overview

Euler Earn is an open-source protocol for permissionless risk curation on top of ERC-4626 vaults. It allows passive yield seekers to deploy assets into both Euler Vault Kit (EVK) vaults and external yield-generating strategies outside of the Euler ecosystem.

Introduction

Euler Earn vaults are ERC-4626 compliant vaults that act as yield aggregators, accepting deposits in a single underlying asset and allocating those deposits across multiple yield-generating strategies. Each Earn vault is managed by risk curators who are responsible for:

  • Adding and removing strategies
  • Setting allocation proportions across strategies
  • Rebalancing funds between strategies
  • Managing risk through caps and emergency modes
  • Setting performance fees (optional)

The protocol is designed to be non-custodial and secure, with granular access control and immutable core contracts.

Key features

  • Multi-strategy allocation: Distribute assets across multiple ERC-4626 compliant strategies
  • Cash reserve management: Maintain a portion of assets as unallocated for withdrawal liquidity
  • Role-based access control: Granular permissions for different vault operations
  • Harvest and yield distribution: Collect yields from strategies and distribute to depositors
  • Interest smearing: Distribute harvested yield over time to prevent sudden price jumps
  • Circuit breakers: Emergency modes for individual strategies
  • Performance fees: Optional fee structure for vault managers
  • Native governance integration: Built-in ERC20Votes support for vault governance

Protocol architecture

The Euler Earn protocol consists of these core components:

EulerEarn contract​

The main vault contract that implements the ERC-4626 standard and manages:

  • Strategy allocation and rebalancing
  • Deposits and withdrawals
  • Yield harvesting and distribution
  • Performance fee collection

EulerEarnFactory​

A factory contract that deploys new Euler Earn vaults using a minimal proxy pattern (clones). The factory keeps track of all deployed vaults and provides functionality to query them.

Strategy management​

Strategies in Euler Earn are simply other ERC-4626 vaults. Each strategy has:

  • Allocation points: Determine what percentage of total funds should be allocated
  • Cap: Optional maximum amount that can be allocated
  • Status: Can be Active, Inactive, or Emergency

Access control model​

Euler Earn uses a role-based access control system with these key roles:

  1. Default Admin: Manages admin roles
  2. Strategy Operator: Adds/removes strategies
  3. Euler Earn Manager: Sets fees, configures hooks, manages rewards
  4. Withdrawal Queue Manager: Reorders withdrawal queue
  5. Guardian: Sets strategy caps, adjusts allocation points, manages emergency statuses
  6. Rebalancer: Executes rebalance operations

Each role can be assigned to different addresses, allowing for decentralized management of the vault.

Use cases

  • Risk curation for passive lenders: Provide a simplified interface for users who want exposure to Euler lending markets without managing individual positions
  • Multi-strategy yield aggregation: Create optimized risk/reward profiles by allocating to multiple strategies
  • Yield product creation: Build branded yield products with professional risk management
  • Treasury management: DAOs and protocols can use Earn vaults for treasury yield generation