Research summary
This review rejects Euler V2 as a protocol-wide exposure but leaves a path to reopen a specific vault. This is not a postponed judgment. The original Euler lost about $197M in March 2023 and recovered 100% of the stolen assets. Their value was about $240M when returned. Euler V2 launched in September 2024 after a ground-up rebuild. Those facts deserve weight, but they do not support protocol-wide approval. Current evidence shows that Euler did not report $137M of protocol bad debt from Stream Finance. Its 2026 retrospective says Ethereum DAO-managed markets had zero direct Stream exposure, while the incentivized Plasma deployment lent heavily to Stream and was effectively wiped out. That is still a serious allocation and governance failure, not a second core-contract exploit. V2 is permissionless infrastructure: each EVK vault chooses collateral, LTVs, interest-rate model, oracle, hooks, governor, and upgrade posture. EulerEarn can allocate across as many as 30 ERC-4626 strategies, including external ones. “Known” vault metadata explicitly is not an endorsement, and curators can later change parameters. The formal rejected verdict states the decision clearly: reject Euler as a protocol-level exposure and reopen only a named vault after an independent, address-specific dossier. Brand, aggregate TVL, and audit count are not substitutes.
Observable review triggers
- No protocol-wide approval: only a named vault can be reopened
- Any candidate vault holding or accepting an asset outside the approved list
- Any realized bad debt, oracle failure, or loss in the candidate vault or an underlying strategy
- Governor, curator, strategy, oracle, implementation or upgrade posture changing outside the documented exit window
- Proposed-size withdrawal failing the written stress-liquidity limit
Facts on file
- Verdict
- Rejected
- Type
- Dollar lending
- Chains examined
- Ethereum
- Instruments
- USDC, USDT, WETH
- Reviewed
- Last confirmed