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Vaults

Vaults are the building blocks of Euler. An EVK vault creates a lending market for one underlying asset under its own configuration. An EulerEarn vault gives a user one deposit position while allocating the same underlying asset among enabled strategies. Both issue ERC-4626 shares, but they solve different problems.

Use an EVK vault when you want to supply directly to a particular lending vault, borrow from it, or use its shares as accepted collateral in another vault. Use an Earn vault when you prefer one share position whose configured roles manage allocation across a set of strategies.

EVK vaults

EVK vaults extend ERC-4626 with lending and borrowing functionality. Each vault holds one underlying asset; suppliers receive vault shares, and borrower interest accrues to the vault subject to its configured fees. Unlike many strategy vaults, an EVK vault's core yield source is borrowing from that vault rather than an external investment strategy.

The architecture of an EVK vault consists of several key components working together:

  • Underlying Asset: The ERC-20 token held by the vault, with each vault holding exactly one type of asset
  • EVault: The primary entry point contract implementing common vault logic:
    • Tracks deposits and borrows
    • Validates position health
    • Permits liquidations
    • Uses static modules for code organization
  • Price Oracle: Uses the vault's configured oracle route to value collateral and liability for onchain account checks
  • IRM (Interest Rate Model): Determines borrowing rates to incentivize or discourage borrowing based on market conditions
  • ProtocolConfig: Global protocol-level configuration supporting fee destinations and splits. Euler protocol fees are currently set to zero.
  • DToken: A read-only ERC-20 interface for debt amounts, making debt modifications visible in block explorers and trackable by tax-accounting software

Governance and risk management

EVK vaults can be either governed or finalized (ungoverned), offering different approaches to risk management:

Governed vaults are actively managed by a governor or risk curator who can adjust parameters like accepted collateral, borrowing limits, and pricing models as market conditions evolve. This approach can reduce the amount of parameter management a user performs directly, but it also means users depend on the curator's decisions and operating process.

Finalized vaults have their vault-level governor revoked, so EVault parameters controlled by that governor can no longer be changed. Other authority is deployment-specific: a separately governed oracle router or connected collateral vault can still change, and a vault deployed behind an upgradeable beacon can still depend on the factory's upgrade administrator. Review the deployed contracts and every connected role before treating a vault as fixed.

Earn vaults

Earn vaults are designed for users who want one position with allocation across configured strategies instead of manually moving assets among individual lending vaults or other ERC-4626 strategies. Built on the ERC-4626 standard, they accept one deposited asset and issue shares that represent the user's claim on the Earn vault.

Curators and allocators manage the strategy set, caps, queues, rebalancing, and liquidity plan within the vault's configured permissions. This delegates day-to-day allocation decisions while keeping allocations and role addresses visible onchain. Users still need to choose the Earn vault and evaluate its manager, strategies, fees, and withdrawal liquidity.

Key features

Earn vaults provide a single deposit and withdrawal interface while allocation happens inside the vault. Configured roles can manage allocations only through actions authorized by the deployed contracts. Outcomes still depend on strategy performance, fees, liquidity, allocation decisions, role permissions, and market conditions.

Vault composition

One of Euler's main vault design features is the ability to compose vaults together. By linking EVK vaults as collateral for one another, creators can design various forms of markets. These can range from simple isolated collateral-debt pairs to complex, cross-collateralized clusters.

Risk curators and asset managers can layer Earn vaults on top of EVK vaults to allocate deposits across selected strategies. This composability enables more complex products, but each layer adds dependencies that users and curators should review.

For more detailed information about the implementation and technical specifications, please refer to the Euler Vault Kit repository.