Euler is a permissionless lending protocol rebuilt as “V2” around two primitives: the Euler Vault Kit (EVK) for launching isolated markets and the Ethereum Vault Connector (EVC) that lets those markets interoperate as collateral. This modular approach aims to avoid the “one-pool” contagion problem while keeping capital efficient. Developers and liquidity providers can list or support assets with custom risk parameters rather than waiting on centralized listings.
Because it’s Ethereum-native infrastructure, Euler affects broader DeFi by giving protocols a safer way to borrow against long-tail tokens, and its EVC can become connective tissue between vaults. EUL governs fees, parameters, and incentives; programs and gauge-style voting steer rewards toward desired markets as usage evolves. The project’s comeback after the 2023 exploit (with funds largely returned) highlights both demand and the importance of rigorous risk controls going forward.