Euler beyond Ethereum

Euler beyond Ethereum

Euler is going multichain. This is a recent development, and it reflects Euler’s commitment to increasing access to open and fair financial tooling. In doing so, Euler will be available to a wider number of users who will be able to transact with more assets than ever before.

Why multichain?

Euler has been exclusively on Ethereum mainnet since its deployment, and the DAO has decided that the time is right to deploy on other chains. This decision is supported by both pull factors from other chains as well as push factors that may be constraining Euler should it stay on just Ethereum.

One note important enough to put right at the front: Despite this multichain push, Euler will still be marching at full speed on Ethereum mainnet. Contributors are developing exciting new features which will of course initially be optimised for Etheruem at launch.

Multichain pull factors

More assets

As a lending and borrowing protocol, assets are Euler’s bread and butter. If Euler is to launch on new chains, then it is going to gain exposure to an exponentially greater number of assets thanks to there simply being more assets to deploy. There are tens of thousands of assets that are not on Ethereum, and by expanding to multiple networks, tens of thousands of new potential markets could be opened, driving usage and bringing deeper utility to the platform. A potential example of this could be the LSD narrative developing, using wstMATIC instead of wstETH. Look at the number of different BEP20 tokens versus ERC-20 tokens - the potential for Euler to enable lending and borrowing on these assets is unrivalled.

Deepening ties with new parties

While Ethereum has the most mature and developed community, other interesting, engaged and passionate communities exist outside of its ecosystem. In bringing Euler to these communities, the protocol could develop strong ties to important entities in DeFi and further drive usage metrics. This will further entrench Euler by raising awareness of its comparative advantages versus other protocols. If we take the example of BNB Chain, Euler’s deployment there could make inroads with non-English speaking communities, something Euler at the moment is largely constrained to.

Push factors

As it stands, Ethereum has been a great host to Euler. The protocol has grown an incredible amount against a near apocalyptic backdrop thanks to the enduring support and friendship of the L1. However, certain constraints have become more and more clear as time has gone on.

Concentrated market with large incumbents

Lending and borrowing was one of the original applications for Ethereum, with ETH Lend (now Aave) launching 4 years ago now. Indeed, DeFi summer began with Compound’s visionary liquidity mining program and its effects left an indelible mark on the ecosystem we all now live and breathe. These incumbents have since gone from strength to strength, ensuring the basic needs of lenders and borrowers on Ethereum are (generally) met. In doing so, they have cemented brand loyalty and developed a strong following of users who know and love their products. This is a significant first mover advantage, and brings with it many benefits for those taking these first moves.

This has meant that Euler, which launched on mainnet barely 1 year ago, has had to struggle for air against a backdrop of incumbents with massive (comparatively and objectively) TVLs, treasuries, ecosystems, DAOs, contributors and countless other factors assisting their deeper entrenchment. While Euler has grown exponentially in comparison to these other protocols to its impressive level of usage today, there is only so much juice left to squeeze from one chain.

Other chains, while already arguably concentrated, present an opportunity for Euler to shine. Visualise the potential of moving to another chain without these entrenched protocols suffocating new entrants.

The plan ahead

Looking to the future, the DAO has already decided that BNBChain will be the first deployment of Euler beyond Ethereum. This eIP was one of the most hotly debated in Euler’s history, and with good reason. After much consideration, the DAO decided to deploy to BNB. Significant testing is going on in the background, alongside productive discussions about which bridging solution to facilitate the move.

Compatibility with BASE has also undergone significant testing, thanks to BASE infrastructure being largely derived from Optimism. Contributors have already deployed Euler to BASE testnets.

Other chains are being discussed by the community, with the likes of Optimism, Arbitrum and Polygon all under active discussion as to whether or not they are suitable to host another instance of Euler.  

While there are many details yet still to figure out and more debates to be had, it is clear that Euler is closing a chapter of its story by branching out beyond Ethereum. Contributors are working day and night to help execute this vision, and users can look forward to seeing their favourite protocol spread its reach beyond Ethereum.