[Serenity Premium] Euler, its Revenue and Valuation [Initial Review Jul 2025]

Euler Finance is one of the biggest lending protocols and has been rising very fast since the beginning of the year. TVL peaked at $1.25 billion a few days ago, from less than $100m this Jan. There are many research pieces on how Euler Finance works. This article focuses on its revenue and checks its valuation.

The Basics of Euler Finance

Euler Finance is a lending protocol founded as early as 2020, but suffered a major hack in 2023. Hacker returned all the funds eventually, but it took Euler team a year long to revamp the product and launched again in early 2025.

Unlike earlier lending platforms (e.g. Compound or Aave) that restrict listings to a curated set of tokens, Euler pioneered permissionless lending markets, allowing anyone to create a lending market for almost any ERC-20 token without needing prior approval. To mitigate the risks of low-quality collaterals, Euler Finance utilizes a curator system to manage and oversee various aspects of its lending and borrowing protocol, especially with regard to the governance and risk management of its assets. Curators are responsible for adjusting and optimizing risk parameters across Euler’s lending markets. These parameters include collateral factors, interest rates, and LTV for different assets.

Euler's "permissionless + curator" structure, coupled with other features like EulerSwap/Multiple, makes it the most innovative lending market this year. Influenced by Euler (and also Morpho), Aave is discussing a proposal to apply a risk premium to its assets to allow faster asset listing. Morpho, is following Euler's steps to include swap features, which supports automated leverage within the protocol.

For details of Euler's operation matrix, this Dune Dashboard is comprehensive.

Revenue of Euler Finance

Similar to other lending protocols, Euler charges a fee on the capital lent, on selected markets. For instance, the below $rlUSD vault in Euler Prime market on Ethereum, charges a 10% interest fee on the $5.76 million borrowed at 6.15% borrowing APY. For this market, Euler keeps 100% of the interest fee, whereas in some other markets, Euler shares the interest fee with the curator, typically 50% each. So, the $rlUSD vaults will generate a revenue of $5.76m x 6.15% x 10% x 100% = $35,424 per year.

The revenue split with curator is coded in the smart contract.