Euler price

FAQ About EUL

• What is the EUL token used for?

  The EUL token is the governance token of the Euler protocol. Holding and staking EUL grants users voting rights on key protocol decisions, such as parameter adjustments, treasury management, and future upgrades, allowing the community to govern Euler in a decentralized manner.

• What are EUL's three primary utilities within the protocol?

  $EUL is the native ERC-20 governance token of the Euler protocol. Its primary functions are:
  1) Governance: voting on all protocol changes and treasury management;
  2) Fee Flow Auctions (used to bid for a portion of the protocol's revenue;
  3) Rewards distributed to users for participation.

• What are the key elements of Euler’s risk engine for managing volatile assets?

  The protocol uses several tools to manage risk on volatile assets:
  1) Reactive Interest Rates (adjusting automatically based on utilization;
  2) Collateral and Borrow Factors (set based on asset risk tier;
  3) Isolated Risk Tiers (separating high-risk assets to prevent contagion).

• What makes Euler different from other DeFi lending protocols like AAVE or Compound?

  Euler introduces several key innovations, including:
  Permissionless Listings: Any ERC-20 asset can be listed without a governance vote, using Uniswap v3 as a price oracle.
  Reactive Interest Rates: Interest rates adapt more dynamically to market conditions.
  Risk-Based Tiering: Assets are categorized into distinct tiers (e.g., collateral, cross, isolated) to protect users from high-risk, volatile assets.
  MEV-Resistant Liquidations: A unique Dutch auction system for liquidations that is fairer and more resistant to Maximal Extractable Value (MEV).

• What are the risks of using Euler Finance?

  Like any DeFi protocol, Euler involves risks such as smart contract vulnerability (despite audits), market volatility leading to undercollateralization and liquidation, and oracle failure. It is crucial to understand these risks and only use funds you can afford to lose.

• How do liquidations work on Euler?

  Instead of fixed-liquidation bonuses, Euler uses a Dutch auction mechanism. When a position becomes undercollateralized, the liquidation discount starts high and decreases over time. This system is designed to be more capital-efficient and less prone to harmful MEV strategies.