What is Euler?
Euler is a non-custodial lending protocol on Ethereum. Unlike monolithic markets where every listed asset shares one risk pool, Euler is built around isolated vaults that can be combined into custom lending markets. Each vault defines its own collateral rules, oracle, and interest model, so the failure of a long-tail asset does not automatically cascade into blue-chip markets.
The modular vault architecture
The current version of Euler is built on the Ethereum Vault Connector (EVC), a primitive that lets independent vaults reference each other for collateral checks without merging into one risk surface. In practice this means:
- Vault creators choose which assets count as collateral and at what loan-to-value ratio.
- Risk for one market does not automatically leak into another, even when assets overlap.
- Curators can publish opinionated lending markets on top of the same shared infrastructure.
Metrics worth watching
For a lending protocol, three numbers carry most of the signal:
- TVL — total value supplied across all vaults. Sustained growth indicates deposit confidence; a sharp drop usually precedes or follows a risk event.
- Total borrows — actual demand for leverage. Rising borrows alongside flat TVL push utilization up and interest rates with it.
- Utilization per vault — high utilization on a single blue-chip vault is usually healthy; high utilization on a thin long-tail vault is a liquidity warning.
What to alert on
For Euler, the most actionable alerts are sudden TVL changes (24h moves of 10% or more often coincide with vault deprecations or large unwinds) and step changes in total borrows, which tend to lead utilization and interest-rate moves.