Euler Finance Launches New DeFi Lending Platform in Crowded Market

The Paradigm-backed startup hopes a focus on long-tail assets and some unique features will enable it to compete.

AccessTimeIconDec 13, 2021 at 2:11 p.m. UTC
Updated May 11, 2023 at 4:06 p.m. UTC

A new decentralized finance (DeFi) lending platform has launched on mainnet today, with its backers hoping a focus on long-tail assets and unique features can help it carve out market share.

On Monday, Euler Finance announced their mainnet launch after 15 months of development. The platform allows for permissionless lending and leverage, and according to a demo showed to CoinDesk, boasts a number of features that may help it stand out in a competitive lending space.

Euler’s key feature is that users can borrow multiple assets at once while also posting multiple forms of collateral at the same time, which will streamline loan management for power users.

Additionally, listing new markets on Euler is permissionless, meaning that with the existence of a Uniswap market, users can create markets for borrowing and lending long-tail assets and niche tokens. In order to mitigate the risks associated with these often volatile assets, they can only be borrowed as an isolated asset and not as a bundle of assets.

The platform’s liquidations are an open system that uses a reverse dutch auction market that slowly raises the collateral liquidation percentage, as opposed to major markets that tend to have a set liquidation rate, hypothetically making liquidations less costly for users. The platform also has a built-in stabilization feature that takes a portion of liquidated collateral and adds it to the platform’s underlying reserve.

Crowded market

The closest competitors to Euler currently on the market may be Sushi’s Kashi permissionless lending platform and Rari’s Fuse pools, both of which allow users to set up their own money markets.

In the shadow of giants like Compound, it can often be difficult for new projects to gain steam. In an interview with CoinDesk, Euler founder Michael Bentley said that the platform is hoping to attract users with its accessibility to a wide swath of assets.

“In terms of the market share that we’re trying to carve out, we’re providing a home to retail users where they can come in and possibly deposit a whole basket of assets and hope to have earned some yield on those assets, and on the trading side, being able to access a wider range of assets to arbitrage and trade,” he said.

The project doesn’t expect to see explosive growth out of the gate, and indeed Bently told CoinDesk that the team of 10 would prefer a slow-and-steady approach.

“From our perspective, we’re really focused on managing risk –  I don’t want to target some total value locked number we can market to people,” he said.

Euler will also be launching a liquidity mining program which will distribute governance tokens to lenders and borrowers in Q1 2022. Bentley specified that there will not be a retroactive airdrop for early users, as they are too easy to exploit.


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Andrew Thurman

Andrew Thurman was a tech reporter at CoinDesk with a focus on DeFi.

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