Six months after launching, Euler v2 has reached an all-time high $700M TVL. It is among the fastest growing lending protocols in 2025, a real accomplishment in a vertical known for being fiercely competitive and ossified. Euler’s total utilization stands at 44%, higher than the industry average of 40%, indicating sticky organic liquidity that balances the preferences of lenders and borrowers.

Despite its impressive trajectory, few understand what Euler v2 truly brings to the table. Though Euler’s mindshare on crypto twitter is climbing, most discourse is presently about yields. Don’t get me wrong, yields are the lifeblood of any DeFi protocol—and Euler has heaps—but I wish more retail understood the zero-to-one innovation that Euler makes.

Paradigm Shift

One challenge in defining Euler v2 is that it does not fit neatly into existing categories. Lending protocols are usually built according to a given market hypothesis. Aave, for example, prioritizes safety through governance and active risk management, while Morpho takes a minimalistic, immutable approach to reduce technical risk. Structurally, Aave follows a cross-collateralized model for efficiency, whereas Morpho opts for isolated pairs to quell contagion.

Each approach has trade-offs. Paternalism is good until your emperor foists a backroom deal on you, changing risk exposure overnight. Immutability is great until your market’s pricing assumptions no longer hold and lenders scramble for the exit. The monolith is deeply liquid and efficient until the weakest link falters, tacking on bad debt. On the other hand, isolated pairs are often unsuitable for large borrowers.

Rather than sticking to one philosophy, Euler v2’s modular system lets builders and risk managers customize lending markets for any risk appetite. While there is merit to doing a single thing well, Euler’s approach is to cast a wide net to capture the diversity of risk preferences in lending. In a space that redefines itself every six months, it pays to be flexible.

Only Possible on Euler

Euler v2 is the first meta-lending protocol, breaking down lending markets into modular components. Builders can then mix, match, and customize these parts to create entirely new lending products with little (or sometimes zero) extra code.

Out of the box, Euler v2 can already replicate existing lending models. For example, Euler can reimagine Aave offering finer risk controls and superior liquidation mechanics. It can also improve on Morpho’s isolated lending model by supporting ungoverned clusters instead of pairs with a diversity of interest rate models and an advanced oracle system. And that’s just the start. Hooks, operators, and controllers unlock lending designs that are difficult or impossible on other platforms.Euler is already powering innovations like Usual’s Stability Loan, a massively popular lending product built with hooks. This same tech enables fixed-term lending, synthetic assets, permissioned markets, and the new [redacted]. If you’re building a lending protocol, chances are you can do it on Euler with less code (or none at all), while inheriting security and tapping into existing infrastructure.

Of course, modularity also introduces challenges. Flexibility comes at a cost: Euler’s code is dense, highly abstract, and presents non-trivial edge cases. Building on Euler requires more developer attention and finesse than simple fork-driven development. The upside to doing it, however, is too big to ignore.

Dawn of the Lending Super App

Similar to the Optimism Superchain, products in the Euler family are greater than the sum of their parts. Vaults speak the same language thanks to the ERC4626 standard and the Ethereum Vault Connector, a deeply integrated interoperability layer. As a result, every Euler vault can enable any other one as collateral, creating an infinite network of liquidity.

Even at $700M TVL the Euler ecosystem is still in its infancy. Most of that liquidity is locked in traditional risk-managed lending structures. Yet we are starting to see a class of bespoke products take hold: the Usual Stability Loan (USL) vaults are the fastest growing Euler vaults ever, topping $190M TVL. With at least a dozen other teams actively developing new products and integrations, Euler is on the cusp of rapid expansion.

In DeFi, capturing user flow is the key to becoming profitable. As infrastructure fees shrink, the applications that people use to transact (like Uniswap or Metamask) are the ones that can sustainably charge fees users are willing to pay.

Euler’s endgame is the Lending Super App: integrate a growing garden of lending products in a unified user-friendly application. As adoption grows, every transaction, vault, and integrated product strengthens Euler’s network effects, reinforcing its flagship position as the first true Lending Super App.For developers and DeFi innovators, now is the time to explore Euler’s full potential. Whether you're building structured lending products or rethinking traditional models, Euler v2 provides the infrastructure to make it happen.

The Lending Super App era has arrived—are you ready?