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Euler

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Euler is a team of software engineers and quantitative analysts specialising in the research and development of financial applications.

Euler protocol features a number of innovations not seen before in DeFi, including permissionless lending markets, reactive interest rates, protected collateral, MEV-resistant liquidations, multi-collateral stability pools, and much more.

Euler labs is a team of software engineers and quantitative analysts specialising in the research and development of financial applications, currently pursuing the democratization of lend and borrow markets.

Euler Finance is a non-custodial permissionless lending protocol on Ethereum that helps users to earn interest on their crypto assets or hedge against volatile markets without the need for a trusted third-party.


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Building the web3 economy

Euler Finance

Euler Labs

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Fast-track EIP #31 - move WBTC to an explicit Wrapped Bitcoin Chainlink oracle
Author(s): river0x, building on Millie & EIP #30

Related Discussions: https://discord.com/channels/742749441697513632/780943855155413034/1045366205176881252, https://forum.euler.finance/t/rfc-change-susd-pricing-oracle-to-chainlink/480/19, https://forum.euler.finance/t/eip-30-upgrading-to-chainlink-oracles-for-several-markets/495/2

Submission Date: 24/11/22

Simple Summary:
Move the WBTC oracle to a WBTC-ETH with the aim of promoting more accurate pricing of the asset. The current oracle prices wBTC as BTC, which does not reflect the risk of wBTC trading at some other price (as sometimes happens with derivative assets).

Abstract:
At the moment, the protocol prices WBTC as BTC. This is incorrect, and should be updated. Indeed, an existing eIP (28) already touched on this issue but given the current situation I propose the DAO updates this contract sooner. This is solely out of an abundance of caution and this eIP stands to mitigate a risk solely presented to Euler at this time.

Motivation:
This will update the protocol to price WBTC as WBTC, as opposed to its current configuration. While this requires some work and overriding of an existing structure, it costs the DAO little to nothing to be cautious here and so I suggest we move forward with this update.

Specification & Implementation:
The oracle has already been deployed. If this proposal passes, the WBTC oracle on Euler will be updated to this price oracle.
Given the time sensitivity of this issue, I proposed to the DAO that we make this vote a 24h vote and received 19 votes in favour of this and 0 against this petition. I am submitting this snapshot vote now.
If passed, The Euler Foundation will execute this EIP and WBTC on Euler will be priced as WBTC, as opposed to BTC.
Please note, this does not affect any other asset in EIP 30. All other assets will still be subject to the existing voting period & will be implemented (or otherwise) based on that outcome.

Voting:
Yes - move WBTC to the explicit WBTC Chainlink oracle. This is to be implemented by the 3PM EST, on the 25th of November. This is because it is a fast-track vote that has been approved and discussed as per the DAO.

No - leave the WBTC oracle as is.

Fast track eIP #31: Move WBTC oracle to an explicit WBTC Chainlink Oracle

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### Getting Started

The code for Euler Protocol is controlled by a decentralised community through on-chain governance on the Ethereum network. The community are holders of a protocol-native governance token called EUL (pronounced 'oil'), which enables the community to effect change over the Euler Protocol code. Tokens can be used to propose upgrades to the protocol or vote on the proposals of others.
Protocol Code
Governance can vote to effect change over the Euler Protocol for parameters such as:
1.Default isolated tier borrow factor
2.Collateral and borrow factors of specific assets
3.Inclusion of an asset in the cross and collateral tiers
4.Change in choice of risk parameters and general methodology

​On-Chain governance, allows unique features such as delegated voting and proposition powers, as well as protocol (and governance configuration) updates via a time lock executor. This ensures the protocol can adapt to evolving market conditions, as well as upgrade core parts of the protocol over time.
On the other hand, for off-chain governance, there is no code to review or implement as such. It is mainly a call for the Euler Foundation to carry out an action. Issue a grant, or pay a bill, for example. Thus mainly used to aid Euler in making difficult decisions in collaboration with the community.
Euler protocol uses the Tally governance interface for on-chain voting. Snapshot on the other hand is an interface use for off-chain or 'gasless' voting.
Process
The General Governance Process is documented on the Governance Forum.
The flow of the governance process is as follows:
1.Discuss the idea/draft proposal in the Euler Discord #governance channel
2.Draft & create a RFC (Request For Comment) Proposal on Governance forum for further feedbacks
3.Contact a forum moderator to create a eIP (Euler Improvement Proposal) on the Governance forum
4.eIP created on Snapshot (off-chain voting)​
This is a necessary step for all types of proposals, and execution will be carried out by Euler Foundation if the proposal is successful.
5.Optional step — eIP created on Tally (on-chain voting)
If and only if the proposal includes changes to the smart contract, the proposal will be voted on Tally after Snapshot voting. Execution will be targeting Euler protocol smart contract if the proposal is successful.
It is noteworthy that not all off-chain proposals that are either binding or non-binding on the protocols smart contracts will end up having an on-chain proposal depending on the outcome of the off-chain 'gas-less' voting and for gas cost savings. On the other hand, not all on-chain proposals will require an off-chain counterpart.
Depending on the outcome of an off-chain voting process, an on-chain proposal might be created which will be executed against a target protocol smart contract if successful.
If an off-chain proposal requires an on-chain proposal that will be executed against a protocol smart contract, then the general flow could be as follows:
Creation of a formal Idea/Proposal on Governance forum for discussion → Proposal created on Snapshot (off-chain proposal creation) → Off-Chain Voting → (if on-chain governance is required) eIP (Euler Improvement Proposal) creation on Governance forum by forum moderator → eIP created on Tally (on-chain proposal creation) → On-Chain Voting (and Execution on target Euler protocol smart contract if successful).
Idea
A great place to start a discussion on a potential governance proposal is the idea section on the forum website. If you feel confident that your idea is relevant to the community and is well-formulated, head over to the Governance Forum to begin a discussion with the community around your idea (following the process described on the forum).
Once a discussion / commenting begins around your idea, be proactive with the community and be open to suggestions. It typically takes a week for the request for comments to mature before it becomes an eIP.
### Governance Proposal
If the discussion is well-formulated and the community has a clear understanding of the proposal and supports your idea, (for on-chain proposals) it will be moved by a moderator to the governance category as an eIP: Euler Improvement Proposal. Once the proposal has an eIP, an on or off-chain proposal can be created on the Tally governance dashboard or on the Snapshot governance dashboard.
A Tally or Snapshot proposal does not always need to be created by the original eIP author / proposer, it can be posted by someone else or by on of the delegates in case the minimum threshold of EUL is not being met.
A good governance proposal example can be found here: eIP: Promote WBTC to collateral tier 3.
Stay updated by subscribing to the community newsletter and follow the Twitter Page!


### Phases
Learn more about the Euler Governance launch phases
Governance Launch Phases
### Introduction
EulerDAO will kick off in three phases for a guarded launch towards full decentralisation of the Euler protocol. Each phase is described below.
The EulerDAO uses the OpenZeppelin Governance smart contracts (version 4.6.0) for governance (as well as the EUL token contract). It is a governance protocol — similar to the one Compound uses — where delegates vote on active proposals to make changes to the EulerDAO and Euler protocol.
Euler uses the Tally governance dashboard application to manage the governance process. Through Tally, you can set up your wallet to become a delegate, create on-chain proposals, vote on active proposals, discover delegates in the community, and delegate your voting power to a community member.
#### Phase 1
The first phase of the launch will be such that actions to be performed directly on the Euler protocol smart contracts will be executed by the Euler team on behalf of the community. In this case, all on-chain governance proposals will point to or target the executeProposal(string description, bytes proposalData) function in a stub governance smart contract (in place of the Euler protocol smart contracts).
Should the proposal become successful and executed, the target function will then be executed (via the TimelockController controller smart contract). It will emit the proposal description string and proposal transaction data, which will then be validated by the Euler team and executed against the Exec module via the Euler multisig.
Hence, the governorOnly() modifier in the Euler Governance module smart contract will be checking that the caller of its functions is the Euler mulisig and not the TimelockController smart contract.
To create the proposal transaction data, we have implemented a tool which will help the proposer to auto generate this depending on what actions should be executed.
The proposer can select a token from the dropdown token list (this will auto populate the fields with the current configuration for the token/market on Euler), the proposer can then make modifications and generate the proposal transaction hex to be executed via the Euler Exec module (batchDispatch() function) and use this hex data as the input to the target function in the stub governance smart contract when creating a proposal on Tally.
Examples of the kinds of decisions token holders might vote on include proposals to modify:
The tier of an asset
Collateral and borrow factors
Price oracle parameters
Reactive interest rate model parameters
Reserve factors
#### Phase 2
In the second phase, the governor admin for the Euler Governance module will switch from the Euler multisig to the TimelockController smart contract. Hence, the governorOnly() modifier in the Euler Governance module smart contract will be checking that the caller of its functions is the TimelockController smart contract.
In this case, proposals created via the Tally governance dashboard will need to target the Euler Governance module directly. Successful proposals which receive a higher number of votes in support will then be executed without the control of the Euler team.
During execution, the TimelockController smart contract will call the target function in the Euler Governance module as specified within the on-chain proposal. Proposers will be able to add a batch of actions / functions to be executed within the Euler Governance module into a single on-chain proposal as well.
#### Phase 3
In this phase, the Installer Admin will also be switched to the TimelockController smart contract.
Not only giving the community control over the Governance module for asset configuration modifications but also full control over the protocol including the installer module. This module is used to bootstrap install the rest of the modules, and can later on be used to upgrade modules to add new features and/or fix bugs.
Euler's Governance Proposal Creation Tool for Phase 1
### Introduction
The first phase of Euler’s DAO / Governance launch will be where actions to be performed directly on the Euler protocol smart contracts will be performed or executed by the Euler team on behalf of the community. In this case, all on-chain governance proposals will point to or target a function in a stub governance smart contract (in place of the Euler protocol smart contracts).
Should the proposal become successful and executed, the target function will then be executed (via the TimelockController controller smart contract. It will emit the proposal description string and proposal transaction hex data, which will then be validated by the Euler team and executed against the Exec module via the Euler multisig (on OpenZeppelin Defender).
Hence, the governorOnly() modifier in the Euler Governance module will be checking that the caller of its functions is the Euler mulisig and not the TimelockController smart contract of the DAO.
To create the proposal transaction data, we have implemented a tool which will help the proposal creator to auto-generate it depending on what actions should be executed. The proposal transaction data is simply an encoded version of the on-chain transaction to the Exec module’s batchDispatch function.
The rest of the article will describe the process of creating the proposal transaction data on Euler’s governance proposal creation tool and using the generated proposal transaction data to create an on-chain proposal on the Tally governance dashboard.
### Section 1. Creating the proposal transaction data for Euler’s Exec Module
#### Step 1
Navigate to the proposal transaction data creation tool.
The web application should look like the following image:
![image 18.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669809709/image_18_c64f770671.png)

#### Step 2
The tool requires MetaMask to be installed in your browser. Switch your MetaMask wallet to mainnet.
The tool currently supports the Ethereum Mainnet and our Goerli testnet Exec modules. It will create the appropriate transaction data to be executed depending on the selected network.
#### Step 3
At the top left of the window, we have a text field for proposal description and below that we have a dropdown menu representing a list of tokens, e.g., USDC, DAI, etc.
At the left of the window, under the token list, we have a set of dropdown menus and text fields which will be autopopulated with the current token configurations (if the token has an activated market on Euler).
To create the proposal transaction data, the proposer needs to enter a proposal description and then select a token from the token list. Once selected, the rest of the fields will be automatically populated with the current configuration of the token or market on Euler if it has an activated market.
The image below shows the proposal description and the fields on the left populated with the current market configuration for USDC on Euler:

![image 19.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669809708/image_19_a19afab062.png)

#### Step 4
The proposer can then make modifications and generate the proposal transaction hex data to be executed via the Euler Exec module (batchDispatch() function) and use this hex data as the input to the target function in the stub governance smart contract when creating a proposal on Tally (this is described in Section 2 below).
For example purposes, let’s change the borrow factor of USDC to 0.6. To do this, we simply change the current collateral factor to 0.6 in the text field on the left side of the screen for collateral factor and click on CREATE PROPOSAL DATA. Once we do this, we should see the markdown table showing the changes we want to make to the asset. We will also see the batch items Hex transaction data which we need for our on-chain governance proposal stub governance smart contract on Tally.
![image 20.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669809709/image_20_ce3df0d80e.png)

Note: This process can be repeated for multiple tokens and configurations (or multiple configurations of the same token). They will be added in a batch and encoded to form the transaction data for the batchDispatch functionality in the Euler Exec module.
For example, let us select DAI from the token list and change the borrow factor of DAI to 0.3. Again, the fields are automatically populated when we select DAI and when we change the borrow factor to 0.3 and click on CREATE PROPOSAL DATA. The list of configuration updates is updated to reflect the change we are making to DAI, while the USDC update information still remains. The transaction hex is also updated.
![image 21.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669809709/image_21_2e4669daa0.png)

#### Step 5
To validate the updates we have selected, we can copy the auto-generated hex under batch items hex TX data (under batch items, which is under proposal description) and click on DEBUG TX HEX DATA and paste the copied hex into the text field.
The tool should also decode the hex and show us a markdown with the updates the Euler team will be applying to the selected tokens once the proposal gets executed. The Euler team will also follow this process to make sure that the proposal description reflects the updates to be made before executing the transaction in the Exec module on behalf of the community.

![image 22.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669809708/image_22_4ad115ae91.png)
As shown in the image above, the hex data is decoded to show the updates we selected to be applied to DAI and USDC. There is a close button at the bottom right of the window to close the debug modal and return to the main page.
Once you get to this point, you now have your proposal transaction data which you can use to create your on-chain proposal on Tally. After the voting period, if successfully executed, the decoded hex data will be submitted to OpenZeppelin Defender for the Euler team to execute on behalf of the community.
Please let us know if you have any questions or feedback while using the tool in our Discord Governance channel.

### Section 2.Using the Auto-Generated transaction data for Euler’s Exec Module to Create an on-chain proposal for the DAO on Tally
At this point, we assume you now have the proposal transaction hex data needed for the Euler Exec module’s batchDispatch function. And you want to create the on-chain proposal for members of the community (and delegates) to vote on. If so, please read on!
Below, we will describe the steps required to accomplish this goal.
#### Step 1
Head over to the EulerDAO dashboard on Tally and connect your MetaMask wallet.
#### Step 2
Click on Create new proposal at the right corner of the window.

![image 23.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669809709/image_23_ea864564f4.png)

It should then take you to the proposal creation window below.
![image 24.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669809709/image_24_5bb27b20f9.png)

Click on Continue to move onto the next step (Name your proposal).
#### Step 3
Enter a proposal title and description and click Continue.

![image 25.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669809709/image_25_affdfb24fa.png)

#### Step 4
In the next section, you will be required to specify the governance proposal actions, i.e., target smart contract, target function and parameters. The Tally dashboard allows you to specify multiple actions in a single proposal which will be called/executed if the proposal is successful and executed.
![image 26.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669809708/image_26_edacdebc4e.png)

To add the proposal transaction hex from Section 1 and set the governance stub governance smart contract as the target smart contract, we will click on Add custom action => enter the stub governance smart contract address as the target smart contract. Then select the executeProposal function from the dropdown menu under contract method as the target function in the target smart contract. Here is the interesting part: enter the required parameters, i.e., proposal description string and the proposalData which is your proposal transaction hex data from Section 1.
![image 27.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669809709/image_27_47a81d555c.png)

#### Step 5
Once done, click continue and review the proposal. Once you are happy, you can click Submit on-chain which will open a MetaMask pop-up window for you to sign the transaction to create the proposal on-chain, via the Governance smart contract.

![image 28.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669809709/image_28_68ea4428c2.png)

Introduction to the governance of Euler Finance

Get started with Euler Governance

### Our journey
Euler XYZ started out by winning Encode Club’s ‘Spark’ University Hackathon. In doing so, we beat over 100+ teams from universities across the world to take the prize. You can read more about the hackathon here.

Today, we are delighted to announce that we have closed an $800k seed round led by Lemniscap. The round includes other leading funds LAUNCHub Ventures, CMT Digital, Divergence Ventures, Block0 and Cluster, as well as influential angels Luke Youngblood of Coinbase, Richard Burton and Josh Buckley, CEO of Product Hunt.

![1_cyDHX6dojEfdEJJDXZdzmQ.jpeg](https://res.cloudinary.com/pentaclexyz/image/upload/v1669807268/1_cy_DHX_6doj_Efd_EJJDX_Zdzm_Q_1ce27472cb.jpg)

### Who are we?
Euler XYZ was founded by Dr Michael Bentley (previously post-doc in Mathematical Biology at the University of Oxford), Jack Leon Prior (experienced full stack developer) and Doug Hoyte (experienced solidity developer).

We are also very proud to have onboard Mick de Graaf from PieDAO in an advisory capacity.

![1_4uXZGD514OshnlqL4mvb7w.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669807306/1_4u_XZGD_514_Oshnlq_L4mvb7w_ab6e830b5c.png)
_From left to right: Dr Michael Bentley, Jack Leon Prior, Doug Hoyte and advisor Mick de Graaf_

### What is Euler?
Euler protocol builds upon the foundations of other popular money market protocols like Compound and Aave, but allows users to create their own markets for any Ethereum ERC20 token and features innovative reactive interest rate models backed by control theory that reduce the need for governance intervention in rapidly moving markets.

![1_os6413Ik6-QvTgEzje9V7w.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669807448/1_os6413_Ik6_Qv_Tg_Ezje9_V7w_c5f84ceba1.png)
![1_nLs5XL2wrdLJTruJmXFUNA.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669807448/1_n_Ls5_XL_2wrd_LJ_Tru_Jm_XFUNA_43ca389863.png)
![1_AKEfAz9POVg4zTYY2JN-kA.png](https://res.cloudinary.com/pentaclexyz/image/upload/v1669807448/1_AK_Ef_Az9_PO_Vg4z_TYY_2_JN_k_A_0bc6c25254.png)

### Motivation
Money markets now contribute billions of dollars of total value locked to the burgeoning decentralised finance (DeFi) ecosystem, allowing users to earn interest on their assets.

However, access remains limited to a handful of money markets for a few of the most liquid assets. Increasing access to money markets for more tokens poses a number of challenges that existing protocols were not designed to address.

Euler is a non-custodial protocol custom-built for the long-tail of the market. Several features set Euler apart from other popular money market protocols.

List any asset: powered by Uniswap’s decentralised time-weighted average price oracles, Euler is allowing users to create their own lending/borrowing markets for almost any Ethereum ERC20 token.

Risk-minimised: Euler secures the protocol by tailoring the borrowing capacity of users to the risk profiles associated with the assets they want to borrow and use as collateral.

Reactive interest rates: interest rate models backed by control theory ensure that money markets on Euler adapt to volatile market conditions in real-time without the need for governance intervention.

### The Theory
#### Aave/Compound interest rates:
![0_nKvZmQyAlcLj7VY-.gif](https://res.cloudinary.com/pentaclexyz/image/upload/v1669832090/0_n_Kv_Zm_Qy_Alc_Lj7_VY_9c337fe3b2.gif)

#### Euler interest rates:
![0__0wPpIPCayUTg1kc.gif](https://res.cloudinary.com/pentaclexyz/image/upload/v1669832090/0_0w_Pp_IP_Cay_U_Tg1kc_6c4c5f45b6.gif)

### EulerDAO powered by EUL

Euler will be governed in the long-term by a decentralised autonomous organisation: EulerDAO. Voting rights will be determined by ownership of a community governance token (EUL). Fees generated by Euler protocol will accrue to EUL token holders. Details of the token supply and distribution will be announced in due course.

#### Roadmap
We will soon be recruiting engaged community members to help us test an alpha version of the protocol. Details to be released in the coming weeks. Early ambassadors will be rewarded for their participation and feedback with EUL tokens, so keep an eye out!

The latest innovation in decentralised finance: a permissionless lending protocol with reactive interest rates to address the long-tail of the crypto market.

Introducing Euler

### You have a collateral violation

Collateral violation means you're trying to borrow something without having enough collateral in your account to do so. Make sure you deposit a collateral asset first, like USDC. You can filter collateral assets on the markets page.

### No match, code: NETWORK_ERROR
Please try refreshing the page and make sure you have a stable internet connection and your web3 wallet is on the correct RPC network (e.g., Goerli Test Network).

### No match, code: UNPREDICTABLE_GAS_LIMIT
Try refreshing the page and trying the transaction again. This error also often occurs for other reasons. So if you keep having this issue, please check your browser’s console log and please report the error that it shows.

### Unknown error

Please try refreshing the page. If you receive the same error message, please check your browser’s log for errors and create a support ticket with what you find.

### Transfer amount exceeds balance, please check you have enough tokens in your wallet and make sure they are also not deposited into Euler. 

You don't have enough tokens in your wallet. If using the test, please make sure you have the correct testnet tokens from the official Euler testnet faucet.

### execution reverted: e/too-many-entered-markets

For a given account, you can enter 10 markets max. You should try the transaction with another account or sub-account.

### RPC error

Some RPC providers on the market (i.e. Flashbots Protect RPC) are not compatibile with Euler simulation mode. If this error occurs, the user is advised to change the RPC (i.e. by changing the network in Metamask to default Ethereum network) and refresh the dapp. Having done that, the simulation feature should be functional again.

If, due to any reason, user wants to use their originally selected RPC to send the transaction, the following should be done (example described based on Metamask, actions might differ for other wallets):

1. change the RPC to default Ethereum network
2. add all the desired transactions to the batch
3. assure that the simulation is passing without any error
4. click 'Send txs' button
5. when Metamask pops up
- click on 'New address detected! Click here...' at the top. Then click 'Add a nickname'. Input 'Euler Exec' as a nickname and click 'Save'
- click on 'HEX', scroll down and click 'Copy raw transaction data'
- click 'Reject'
- disregard the error in the dapp
- open Metamask and click 'Send'
- select previously added 'Euler Exec' address
- leave the asset set to ETH
- leave the amount as 0 ETH
- paste your clipboard contents into the 'Hex Data' field
- change the network to desired
- click 'Next' and sign the transaction


Learn about different errors users might encounter from time on the UI and what they mean