Markets

A market on Euler is not one shared pool with one fixed risk model. It is a set of explicit vault relationships. The liability vault acting as controller decides which vault shares it accepts as collateral and applies the oracle route, LTVs, caps, and account checks for debt in that vault.

This makes Euler markets flexible. A market can be a simple isolated pair, a multi-collateral borrow market, or a cross-collateralized cluster where several vaults both lend and serve as collateral.

How markets fit together

VaultsEach vault holds one underlying asset and can define supply, borrow, cap, fee, oracle, and governance settings.

RelationshipsCollateral and borrow links define which vaults can support debt in other vaults.

PositionsUsers supply, borrow, and manage collateral while the EVC coordinates the applicable controller checks.

The Ethereum Vault Connector coordinates authenticated calls, batching, controllers, collateral, operators, and sub-accounts. Solvency is enforced by the applicable controller vault's checks; the EVC does not create borrowing relationships or guarantee solvency independently.

Market designs

The diagrams below show common market shapes. Green arrows show collateral support, amber arrows show borrowing direction, and dashed lines represent extra dependencies that can improve capital efficiency while increasing review requirements.

Simple pairOne collateral vault, one borrow vault

The most isolated design. One asset backs borrowing from one lending vault, which keeps the market easy to reason about.

Rehypothecated pairBoth vaults can lend and back borrowing

Each side can be used as collateral for the other side. Supplied assets can earn yield while also supporting a borrow position.

Multiple collateralMany collateral vaults support one borrow vault

A single lending vault can accept several collateral assets, reducing liquidity fragmentation and creating more borrowing options.

Cross-collateralized clusterSeveral vaults can lend and collateralize each other

This is more capital-efficient, but risk can travel across the cluster if one asset, oracle, or vault configuration fails.

Custom marketMarket creators can compose vaults in many shapes

Euler can connect new vaults to existing vaults, isolate specific assets, or create specialized clusters. Each added connection should be reviewed for caps, LTVs, oracles, liquidity, hooks, monitoring, and governance.

What to review

Before using or launching a market, review the relationships between vaults:

Area	Why it matters
Collateral links	Define which assets can support borrowing and where risk can travel.
LTVs and liquidation settings	Determine borrowing capacity and liquidation behavior.
Oracles	Price collateral and debt for account health checks.
Caps	Limit supply or borrow exposure in a vault.
Liquidity	Affects withdrawals, borrowing availability, and liquidation execution.
Governance and monitoring	Determine who can update parameters and respond to market changes.

Creating a market

To learn how markets work in more technical detail and how to deploy your own versions of any of those described here, visit Curate. You'll find guides on configuring vault parameters, adding custom hooks, implementing advanced functionality, and governing vault risk.