Euler V1 Review 2026: Legacy Lending Market Superseded by V2

Euler V1 is the first version of Euler, a non-custodial lending and borrowing protocol on Ethereum. It aimed to let users lend and borrow almost any crypto asset through permissionless markets. The protocol has been listed since January 2022 and has its own token, EUL.

Today V1 holds only about $25,000 in TVL, and the project's homepage presents Euler V2 as the main product. V2 is described as modular lending infrastructure, with curated Earn vaults, permissioned markets for tokenized assets, embeddable lending for apps, and tools for launching markets. V1 is best understood as the legacy predecessor.

The history matters. V1 was exploited in March 2023, with most of the funds later returned, and the team rebuilt the protocol as V2. The project does not publish a V1 team roster or V1-specific figures on its current homepage, so users should rely on the documentation for legacy details.

Euler is a lending protocol. Lenders deposit tokens into a market and earn interest. Borrowers lock collateral, borrow another asset, and pay interest. If a borrower's collateral value falls too far, the position can be liquidated by third parties to protect lenders.

In V1, assets were pooled in shared markets on Ethereum, and the protocol aimed to support almost any token. Prices come from on-chain oracles, which makes oracle quality and listed-asset risk important for long-tail assets.

V2 changed the structure. Each vault is a separate market with its own assets and rules, and an on-chain connector links vaults so collateral in one can back a loan in another. Curators can launch markets using the Toolbox, and Euler Earn offers a single deposit into a curated vault. V1 users deal with the older, simpler design.

Euler V1 fee details are not published on the current homepage. Interest rates on a lending protocol are set by market supply and demand, so borrowers pay a variable rate and lenders earn a share of it. Users also pay Ethereum gas for every deposit, borrow, repayment or withdrawal.

Anyone interacting with the live Euler app can see rates, utilization and available liquidity on each vault page before committing funds. A V1 user would check the Euler documentation for legacy parameters.

Euler V1 was exploited in March 2023, a widely known incident, and most of the stolen funds were later returned. This shows that even a heavily audited lending protocol can fail. Present-day V1 TVL of about $25,000 suggests few users remain.

For the Euler project overall, the homepage lists more than 60 independent security engagements, formal verification by Certora of properties of Euler V2 core and EulerEarn, and a bug bounty of up to $7.5m. These claims apply mainly to the current products. Lending always carries risks of smart-contract bugs, oracle failures, bad debt and liquidation. The site also links risk disclosures and a MiCA whitepaper, which readers should review. This is not financial advice.

Euler V1 is mainly for people with legacy positions, researchers studying DeFi lending design and incidents, and anyone comparing the original Euler with its V2 successor. New lenders and borrowers should look at the current Euler app and read the risk disclosures first.