Euler Finance: A Remarkable Comeback

Crypto borrow and lend platform Euler Finance has made a significant comeback in the DeFi space.

New Milestones

This week, the protocol reached new all-time highs in total value locked (TVL) and total borrows, which are crucial metrics for DeFi lenders. Despite managing hundreds of millions in crypto, Euler’s figures still lag behind major lending platforms like the multibillion-dollar Aave. This resurgence is particularly impressive given Euler’s struggles following a $200 million hack two years ago.

Rebuilding from the Ground Up

Michael Bentley, CEO of Euler Labs, acknowledged that many doubted the project would survive. However, the team chose to rebuild Euler from scratch, shifting to a highly customizable borrowing hub. As Bentley noted, “There just isn’t a one-size-fits-all when it comes to lending and borrowing.”

Overcoming Challenges

The path to recovery wasn’t guaranteed, with questions around market acceptance lingering after the hack. Euler missed much of the 2024 DeFi surge, undergoing pre-launch security reviews, and only launched its V2 in September 2024, a year and a half later.

Strategic Growth

With a modest incentives budget—”a few million” dollars worth of EUL tokens—Euler successfully attracted users, especially as competitors offered significantly larger incentives. Bentley attributing most growth to product-market fit. Despite the general rise of ether prices in lending markets, Euler is one of the only two lending protocols in the top 10 to report an increase in active loans recently.

Future Outlook

Bentley remains optimistic about Euler’s future growth, even amidst potential bearish trends in the market, stating that the success of Euler V2 sets a positive precedent for continuing expansion relative to other opportunities in the ecosystem.