Crypto borrow and lend platform Euler Finance has made a remarkable resurgence, emerging from the depths of the decentralized finance (DeFi) landscape. This week, the protocol celebrated impressive milestones, achieving new all-time highs in both total value locked (TVL) and total borrows—two critical indicators of activity for any DeFi lending platform.
A Resilient Recovery
With hundreds of millions in crypto assets now under its management, Euler Finance may still trail behind Ethereum’s lending giants like Aave, which boasts a multibillion-dollar valuation. However, this comeback is particularly significant for a protocol that almost faced extinction following a devastating $200 million hack two years ago.
Michael Bentley, CEO of Euler Labs, reflected on the challenging journey, stating, “A lot of people wrote us off and said it would have been totally normal for us to end the project right there.” Instead, Bentley and his team chose to persevere, committing to rebuilding Euler from the ground up.
A New Vision for Lending
The revamped Euler Finance now offers a highly customizable borrowing hub, allowing users to tailor their pools’ risk, yields, and asset parameters. This innovative approach marks a stark departure from the original Euler model, which Bentley described as “a specific product: one lending market.” He emphasized that “there just isn’t a one-size-fits-all when it comes to lending and borrowing.”
Challenges Along the Way
Despite their ambitious plans, the path to recovery was fraught with uncertainty. Although victims of the hack were compensated, Bentley and his team were left to ponder whether the market would embrace a protocol with such a tarnished reputation. Compounding their challenges, Euler missed much of 2024’s DeFi boom while undergoing pre-launch security reviews.
Finally, in September 2024, Euler launched its V2, nearly a year and a half after its previous operations came to a halt. The protocol strategically enhanced its comeback with a relatively modest incentives budget, allocating “a few million” dollars’ worth of EUL tokens to attract users back. Bentley noted that competitors were offering significantly larger incentives, attributing much of Euler’s growth to “product market fit.”
Continued Growth in a Volatile Market
As the price of ether—the crucial collateral asset for lending platforms across Ethereum DeFi—continues to rise, Euler Finance remains on an upward trajectory. Remarkably, it is one of only two lending protocols in the top 10 that have experienced growth in active loans over the past month.
Looking ahead, Bentley expressed optimism about Euler’s future. He remarked, “If this ends up being a bear market, I’m still confident, given the success of Euler V2 so far, that Euler will continue to grow relative to some of the other opportunities out there.”
In conclusion, Euler Finance’s journey from near-collapse to a thriving lending platform is a testament to resilience and innovation in the ever-evolving DeFi space.
