Euler Finance Relaunches with Enhanced Protocol Following $200 Million Breach

The Euler Finance team has launched the second version of its DeFi protocol. The relaunch follows a $200 million attack in March 2023 and comes after 31 audits by Certora, Omniscia, OtterSec, Open Zeppelin, Trail of Bits, and other experts, reports The Block.

v2 is positioned as a “meta-lending protocol.” It is designed to allow developers to create highly customizable vaults for lending operations and open up opportunities for on-chain credit utilization. 

This approach addresses the fragmentation and capital inefficiency that have “plagued” isolated lending markets, according to the press release.

Euler v2 enables the deployment of permissionless ERC-4626 vaults via the Euler Vault Kit, connecting with others through the Ethereum Vault Connector.

These vaults can hold cryptocurrencies, RWAs with permissioned transfer restrictions, synthetic assets, and NFTs. 

Creators can set risk/reward parameters and choose whether to retain governance for risk management or delegate such options to lenders.

Each vault can accept deposits as collateral—a unique feature of Euler, which the team claims can be used to enhance liquidity within the ecosystem.

Upon the launch of v2, the frontend interface supports four classes of vaults: 

• escrow-collateralized; 
• managed; 
• unmanaged;
• yield aggregator vaults.

Asset pricing is conducted using the Euler Price Oracle System — a composite on-chain pricing system based on the IPriceOracle interface.

Euler v2 allows for liquidations on the “open market.” More advanced vault creators will be able to configure their own processes for these operations, according to the team.

EUL remains the governance token for v2.

In the coming weeks, Euler Labs will announce “significant projects” related to the vaults.

The team is also addressing cost issues faced by DeFi users when trading across platforms, the developers promised.

Earlier, MakerDAO rebranded to Sky and renamed the updated versions of the DAI stablecoin and MKR governance token.

Back in March, the Euler Finance hacker returned nearly all the stolen funds to the project, retaining about $19 million as an agreed reward.