This DeFi Protocol Just Got Hacked but Its Token Is Still Doing Better Than a Major U.S. Bank's

Euler's EUL token fell 50% hours after an exploit on its protocol while First Republic shares fell roughly 62% following U.S. bank turmoil.

AccessTimeIconMar 13, 2023 at 9:54 p.m. UTC
Updated Mar 14, 2023 at 2:03 p.m. UTC

Holders of euler (EUL), a low-cap crypto token that lost half its value on Monday after its protocol was hacked, have learned a valuable lesson: No matter how bad things get, somebody always has it worse.

Enter First Republic Bank (FRC), a nearly 40-year-old bank whose stock is down even more badly, despite the fact that it has never been hacked.

First Republic’s 62% swoon led the banking sector’s nosedive Monday as Wall Street digested the collapses of Silicon Valley Bank (SVB) and Signature Bank, both of which did business with crypto companies. By comparison – and in a completely separate corner of finance – euler is down roughly 50% following an exploit in which an attacker used a flash loan to plunder nearly $200 million from Euler Finance, a permissionless protocol that facilitates crypto lending and borrowing.

The two assets were the biggest losers in their respective markets on Monday. Elsewhere in the stock market, assets mostly traded sideways by the session’s close. But in crypto nearly every asset rallied following the news that all bank depositors would be made whole.

FRC’s and EUL’s price actions underscores how investors' perceptions of market events can be more influential than the actual events themselves. First Republic has not defaulted, gone insolvent or been seized by the government; in fact, it raised $70 billion over the weekend to shore up its liquidity. Meanwhile, Euler Finance has lost hundreds of millions of dollars that it has little hope of getting back. Yet, traders punished FRC shares more severely.


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Elizabeth Napolitano

Elizabeth Napolitano was a news reporter at CoinDesk.