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Introduction

Euler V2 is a modular lending protocol built around ERC-4626 vaults. It is designed to be highly flexible, so that the same system can be used to support a variety of financial products, and so that these products can interoperate:

  • Governed/immutable
  • Hypothecated collateral/escrowed collateral
  • Permissionless/permissioned
  • Static/dynamic interest rate models
  • Market/fundamental pricing

Architecture​

The three primary components are:

  • Ethereum Vault Connector (EVC): This is a singleton "hub" contract that connects all of the vaults together, and tracks which accounts are currently being used as collateral to borrow from which other vaults. In addition, the EVC functions as a supercharged multicall-style contract, allowing advanced usage such as batching, simulations, gasless transactions, delegation of privileges to third-party contracts, and more.
  • Euler Vault Kit (EVK): Although the EVC can link together any vault implementation that implements the EVC protocol, the EVK is the primary reference implementation and is the recommended basis for building lending platforms. The EVK supports creation of vaults in a variety of configurations, as determined by the vault creator.
  • Euler Price Oracle (EPO): Accurate prices are critical for the safety of a lending platform. The EPO defines a common interface for querying prices, and includes a reference implementation capable of adapting all the common oracle classes.