Euler Finance, a platform for crypto borrowing and lending, has successfully emerged from the depths of the DeFi landscape.
This week, the protocol achieved new all-time highs in total value locked (TVL) and total borrows—two crucial indicators of a DeFi lender’s activity.
With hundreds of millions of crypto dollars presently under its management, Euler might not be close to the lending giants of the Ethereum ecosystem, such as the multibillion-dollar Aave. However, this comeback is impressive for a protocol that nearly collapsed after suffering a $200 million hack two years ago.
“Many people wrote us off and thought it would have been entirely understandable for us to discontinue the project at that point,” remarked Michael Bentley, CEO of Euler Labs. Yet, his team chose to persevere and completely rebuild Euler.
Their new vision evolved into a highly customizable borrowing platform that allows users to adjust their pools’ risks, yields, and asset parameters. This marked a significant shift from the original Euler, which Bentley characterized as “one specific product: a single lending market.”
“When it comes to lending and borrowing, there isn’t a one-size-fits-all solution,” Bentley explained.
The path to recovery was uncertain: although victims of the hack were reimbursed, Bentley and his team were doubtful about the market’s interest in a protocol that had suffered reputational damage.
Adding to their challenges, Euler largely sat out the DeFi boom of 2024, as it focused on pre-launch security audits. The protocol finally launched its V2 in September 2024, nearly 18 months after remaining inactive.
To reignite interest, the protocol employed a fairly conservative incentive budget: “a few million” dollars’ worth of EUL tokens to attract users back during a period when Bentley claims competitors were dishing out significantly more. Most of their growth, he noted, stems from “product market fit.”
Even now, as ether—a key collateral asset for lending platforms throughout the Ethereum ecosystem—rises in price, Euler is on the upswing. It stands out as one of only two lending protocols in the top 10 to experience growth in active loans over the past month.