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Overview

Introduction

Euler is built on a modular design that abstracts the core requirements of on-chain lending and borrowing into isolated, independently testable modules. These modules can be seamlessly composed to create a wide range of decentralised, credit-based products. The system is structured around four core modules that facilitate the creation of diverse credit markets, complemented by peripheral modules that enhance functionality. This modular approach ensures efficiency, flexibility, and composability, allowing for the rapid development and innovation of decentralised credit markets.

Core

The core of the lending protocol consists of the four key modules listed here.

Euler Vault Kit​

A framework for deploying and managing credit vaults, which are ERC-4626-compliant lending pools extended with borrowing and liquidation functionalities. The Euler Vault Kit (EVK) enables developers to create custom credit markets by linking vaults with configurable collateral, interest rate models, and governance rules.

Visit the EVK repository.

Ethereum Vault Connector​

An open-source and immutable interoperability layer that connects credit vaults, enabling them to serve as collateral for one another. The EVC facilitates efficient transaction batching, account management, and operator delegation, allowing users to manage multiple borrowing positions within a single wallet.

Visit the EVC repository.

Euler Price Oracles​

A modular on-chain pricing system that standardises price discovery across Euler’s ecosystem. Built around the IPriceOracle interface, EPO provides flexible, composable price feeds by integrating with external oracles through adapters and routers. The system supports multiple quote currencies, bid-ask spreads, and customisable pricing models, ensuring reliable price data for lending markets and liquidations.

Vist the EPO repository.

Euler Earn​

Euler Earn is an open-source protocol designed to facilitate permissionless risk curation atop ERC-4626 compliant vaults, including Euler's own credit vaults, enabling users to passively earn yield by depositing assets into non-custodial, immutable vaults. Earn vaults allocate deposited assets across multiple strategies, managed by risk curators who oversee the selection and performance of these strategies.

Vist the Euler Earn repository.

Periphery

The periphery of Euler extends the functionality of the protocol while keeping the core modules minimal, efficient, and secure. The periphery consists of auxiliary contracts, tools, and adapters that interact with the protocol but are not required for its fundamental operation.

Fee Flow​

Euler's fee flow employs a decentralised, MEV-resistant mechanism called Fee Flow to efficiently convert accrued fees from various assets into a single token. Fees accumulate across multiple credit markets and are periodically auctioned off; the auction price starts high and decreases linearly over time until a bidder pays the current price to claim all accumulated assets. This approach ensures that the protocol's diverse fee assets are consolidated effectively, enhancing operational efficiency and reducing reliance on governance interventions.

Reward Streams​

Reward Streams is a versatile system that enables permissionless distribution of multiple tokens as rewards, supporting both staking and non-staking mechanisms. It builds upon the "billion-dollar algorithm" to efficiently allocate rewards proportionally among participants based on their stake or token holdings.

Additional utilities​

A suite of auxiliary utilities enhances the functionality of Euler’s core modules, streamlining integrations with third-party applications, risk curators, and user-facing platforms. These tools improve accessibility, automation, and risk management across the protocol:

  • Lenses – Off-chain query tools that provide real-time insights into vaults and account activity.
  • Perspectives – Validation mechanisms that assess vault configurations and risk parameters to ensure system integrity.
  • Governors – Access control and permission management for vaults and vault factories, enabling fine-grained governance.
  • Hook targets – Customisable extensions that modify the default behaviour of EVK vaults to support unique use cases.
  • Swaps – Efficient asset exchange mechanisms within vaults, optimising liquidity and trade execution.
  • ERC-20 utilities – A set of token-related functions, including Reward EUL (rEUL), to enhance token interactions and incentives.

Conclusion

Euler’s modular architecture provides a powerful foundation for scalable, interoperable, and efficient decentralised credit markets. By abstracting core lending and borrowing functionalities into composable, independently testable modules, Euler enables developers to create innovative financial products with greater flexibility and control. The integration of peripheral components further enhances efficiency, automation, and risk management, ensuring a seamless user experience. As the decentralised finance landscape evolves, Euler's architecture is designed to adapt, fostering continued innovation and expanding the possibilities for credit markets on-chain.