Euler V2

Our assessment

Euler v2 holds $352m across 16 chains with two audits and reports linked. Any assessment has to include March 2023, when the previous version was exploited for roughly $197m — and the unusual outcome that followed.

The 2023 exploit and the return

A flaw in a donation function allowed an attacker to create an artificially undercollateralised position and drain the protocol. Following negotiation, essentially all of the funds were returned — an outcome with almost no parallel at that scale. The team then rebuilt rather than relaunching the same code, which is the response our transparency pillar is designed to reward.

Modular markets by design

v2 lets anyone create a lending vault with its own parameters, oracles and collateral rules, rather than routing everything through one governed pool. This gives flexibility and shifts risk assessment onto the user: two vaults on the same protocol can have entirely different safety profiles, and the protocol's name tells you nothing about which one you are in.

Read the vault, not the brand

On modular protocols, the question is never "is Euler safe" but "who curated this vault, what oracle does it use, and what collateral does it accept". A depositor who skips that has not evaluated the risk they are taking, regardless of how well the base layer scores.

Who it suits

Euler fits experienced users who will evaluate individual vaults and want permissionless market creation. Users who want a single governed risk surface should use Aave or Compound.