Euler (EUL): Q3 2025 Activity and Financial Report
October 21, 2025
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In this quarterly report, we analyze Euler's progress in the third quarter of 2025: analysis of activity on the protocol, product market fit, revenue, monetization, as well as an overview of the progress of new products and a financial analysis of the EUL token. As with every report, we also feature an interview with a member of the team to understand their vision and outlook for the future.
Context on Euler
Overview
Euler Finance is a decentralized lending and borrowing protocol operating on Ethereum and, more broadly, across the EVM ecosystem, with a presence on roughly a dozen blockchains (including Arbitrum, Avalanche, Linea, Plasma, Base, BSC, etc.).
The protocol relies on a modular architecture built around three core components: ERC-4626 Vaults, the Euler Vault Kit (EVK), and the Ethereum Vault Connector (EVC), enabling granular, isolated risk management at both the market and asset level.
Euler is governed by the Euler DAO, which uses the EUL token for governance votes, risk parameterization, treasury management, fee policy, and the approval of new markets through the EIP (Euler Improvement Proposal) process.
Since 2024, the DAO has relied on several specialized entities for critical operations. These include Risk Curators, responsible for risk parameters and market creation; Technical Stewards, who safeguard smart contract security and technical compliance; and Core Contributors grouped under Euler Labs, led by co-founder Michael Bentley.
→ For a deeper dive, see our full presentation of Euler V2:
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Euler V2
For context, the first version of Euler launched at the end of 2021, introducing an isolated-market model that segmented risk by lending/borrowing pair. The protocol was an early pioneer of native and permissionless isolated markets, well before Aave V3’s “isolation mode” or Morpho’s pairwise model.
Despite a hack in march 2023, the team refused to abandon the project. They chose to rebuild, not just repair. In September 2024, Euler V2 went live: an entirely re-architected system centered on modular design to reconcile security, flexibility, and credit-market efficiency.
The new version rests on a novel technology stack combining ERC-4626 Vaults, the Euler Vault Kit (EVK), and the Ethereum Vault Connector (EVC), a coherent ensemble in which each brick operates autonomously yet remains interoperable. Vaults isolate positions and compartmentalize risk, EVK orchestrates economic parameters and oracles, while EVC links the whole and ensures synchronization across markets.
Breaking with the monolithic design of legacy protocols such as Aave or Compound, Euler opted for permissionless composability. Its isolation logic contains incidents within limited perimeters, drastically reducing contagion risk.
→ For more, see our report on the rebirth and rapid ascent of Euler V2:
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Since the V2 launch, Euler has rebuilt its reputation by doubling down on transparency and rigor, with 29 independent audits, 40+ security reviews with a $4M budget, alongside a methodical expansion across the EVM ecosystem.
The protocol has progressively evolved into a full multi-product lending ecosystem, notably integrating Euler Swap, Frontier, and Euler Earn. By 2025, Euler’s TVL surpassed $2B. It is nearly eight times the historical peak reached by version 1.
Today, after a massive rebuilding effort, Euler ranks among the top-10 largest lending protocols, with over $2B in net TVL and more than $1M in revenue over the last 30 days. The protocol has cemented itself as a reference in modular lending, alongside Morpho and Fluid, forming one of the most technically advanced ecosystems in the Ethereum environment.
On-chain Activity Analysis
TVL and Active Loans
With Q3 2025 now behind us, it is time to analyze Euler’s performance over the period. As with any lending protocol, the two most important indicators are the evolution of Total Value Locked (TVL) and active borrowings.
TVL (representing user deposits) grew by 33% in Q3, a strong signal of continued growth. It increased from 2.1 billion dollars to over 2.8 billion dollars in just three months. Active loans followed a similar trajectory, rising by 44% over the same period, from 970 million dollars to more than 1.4 billion dollars.
Activity slowed noticeably at the end of September, offsetting part of the quarter’s growth. This was mainly due to the broader rise in crypto markets, as many participants shifted toward higher-risk asset exposure.
At its peak, the total value of active loans reached 1.5 billion dollars, against more than 3 billion dollars in user deposits. Nevertheless, the utilization rate remained steady at around 48%, meaning that nearly half of the liquidity deposited on Euler is currently being borrowed.
For comparison, Fluid, one of Euler’s main competitors, holds over 6.17 billion dollars in deposits and around 2.15 billion dollars in outstanding loans, representing a utilization rate of roughly 35%.
It is important to note that, unlike Aave, both Euler and Fluid operate with isolated markets where liquidity is not pooled. Assets deposited as collateral are not lent out, meaning that the borrowings-to-TVL ratio does not represent liquidity utilization in the strict sense, but rather the intensity of credit demand within the protocol.
Even so, tracking the utilization rate remains relevant, as it reflects lending activity dynamics and provides insight into the depth of Euler’s credit market. Over the third quarter, the gap between Euler’s total deposits and active borrowings narrowed, signaling improved capital efficiency and stronger yield generation.
Market Footprint and Product-Market Fit
At the end of Q3 2025, Euler’s liquidity distribution remains dominated by Ethereum, which concentrates close to 49% of TVL (deposits and borrows). In total, nearly 80% of Euler’s net TVL now resides on three networks: Ethereum, Plasma, and Avalanche.
The standout event of the quarter is Plasma’s rapid rise. Only two days after launch, Plasma became Euler’s second largest market with close to 20% share, overtaking Avalanche, which had held that position since May. This ratio was completely disrupted in October, particularly with Linea, but we will discuss this in the next report.
From a usage perspective, Euler has capitalized on the market’s dominant trend, namely the rise of stablecoins and their derivatives. Markets backed by stablecoins, whether classic assets or derived versions like Pendle PTs, now account for more than 60% of protocol TVL.
At the top, Usual’s USD0++ has emerged as the primary growth driver, concentrating nearly 20% of total liquidity on its own. This predominance of stablecoins reflects both a shift in Euler’s user base toward structured yield and rate strategies, and the protocol’s ability to respond quickly to the demand for yield-bearing, low-volatility assets.
From a depositor’s perspective, the average APY on Euler stands at 5.64%, compared to 2.10% on Aave and 2.96% on Fluid, which places Euler among the top protocols in terms of lending yields.
Revenues and Monetization
Revenue generation and monetization became a central focus for Euler during Q3. Several governance votes were organized to formalize fee distribution and the evolution of protocol economics. We detail these in the Key Headlines section. Like TVL, active borrows, and EulerSwap volumes, protocol revenue exhibited strong growth over the period.
First, protocol fees more than doubled in three months, rising nearly 110 percent, from under 12 million dollars in Q2 to about 26 million dollars in Q3 2025. On a trailing twelve month basis, average quarterly growth is close to plus 1,000 percent. This figure is impressive, but it is also skewed by very low starting values, which inflate percentage changes.
A more representative lens is the median growth rate, which smooths extremes and reflects the typical quarter to quarter progression, near plus 477 percent.
Regarding revenue, Euler continued its upward trajectory, with an increase of more than 90 percent during the quarter, reaching nearly 1.83 million dollars in Q3 2025, almost twice the prior quarter. Across 2025, revenue is up more than 520 percent since Q1, confirming the protocol’s momentum. At the same time, incentives distributed rose sharply, climbing from roughly 700,000 dollars to more than 3.1 million dollars in the quarter.
This increase reflects both appreciation in the EUL token since Q2 2025 and the launch of Season 2 incentives for the new Frontier product, which we cover below.
Despite higher incentive costs, net revenue to EUL token holders continued to grow, supported by the buyback mechanism. As a reminder, 50 percent of generated revenue is used to buy back and burn EUL. The result is a jump of more than 120 percent in net revenue to holders during the quarter, illustrating the effectiveness of Euler’s value capture model.
While isolated lending protocols as a group show strong momentum, giants like Fluid posted fee growth roughly three times lower than Euler’s over the same period. Even Morpho, the second largest lending protocol and itself in rapid expansion during Q3, did not match Euler’s magnitude of growth.
For Euler, fee growth has even outpaced the protocol’s already sharp TVL increase since late summer. The conclusion is a rise in capital efficiency, meaning each dollar of TVL now generates more fees for the protocol. Unsurprisingly, the user base expanded as well, up about 47 percent from Q2 to Q3 2025.
New Product Analysis
Euler Frontier
Frontier represents the first major extension of Euler V2 since its launch, deployed at the end of Q2 2025. This new infrastructure introduces a lending framework specifically designed for stable and correlated assets, primarily stablecoins and their derivatives such as Pendle PTs, within isolated markets that can reach loan-to-value (LTV) ratios above 90 percent.
Frontier’s objective is twofold. On one hand, Euler aims to maximize capital efficiency by optimizing lending and borrowing pairs with low volatility. On the other hand, the protocol seeks to limit risk contagion by containing each market within an isolated environment, leveraging the EVK and EVC modules.
Conceptually, Frontier is comparable to Aave V3’s E-Mode, but positioned as Euler’s “stable” lending environment. It offers a more efficient setting for carry trade and structured yield strategies.
As of this writing, four months after launch, Frontier’s TVL exceeds 500 million dollars on Plasma and 140 million dollars on Ethereum, confirming the market’s strong appetite for highly specialized lending markets.
EulerSwap
Launched in June 2025, Euler Swap is the native DEX of the Euler V2 ecosystem. It marks a major evolution from the earlier integrations with external AMMs used under Euler V1, by introducing a swap infrastructure directly tied to the liquidity of lending vaults.
Thanks to its “Just-in-Time” liquidity model, Euler Swap allows trades to be executed without locking additional capital. Liquidity is activated only at the time of the transaction, then returned to the lending market immediately afterward.
→ For further reading, see our full report on EulerSwap:
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This approach maximizes capital efficiency, reduces fragmentation between lending and trading markets, and decreases dependency on external AMMs such as Uniswap or Curve. In practice, Euler Swap unifies lending and trading within the same modular architecture, enabling more rational liquidity management across the entire Euler ecosystem.
Trading volume has grown strongly as well, rising from 530 million dollars in June (at launch) to over 1 billion dollars the following month. Fees followed a similar path, surging from under 4,000 dollars in June to over 25,000 dollars at the start of Q3, an increase of more than 500%.
Despite the August market correction, monthly volume never fell below 500 million dollars, and revenues remained more than five times higher than at launch, confirming the model’s resilience even in volatile conditions.
In September, Euler Swap once again surpassed 1 billion dollars in monthly volume, while fees increased nearly fourfold compared to August and more than tripled relative to July, demonstrating the DEX’s ability to sustain durable volume and efficiently monetize its liquidity.
Although still relatively young, the product’s early performance is remarkable, with over 3,000% growth since its launch at the end of the previous quarter. Even more promising, just days into Q4, generated fees already represent more than 10 percent of Q3 totals and 3.5 times those of Q2, all within less than ten days.
EulerEarn
Announced at the end of August 2025, Euler Earn marks a new phase in the protocol’s expansion strategy. Its goal is to simplify access to DeFi yields by eliminating the technical friction and time-consuming processes typical of yield farming or advanced lending strategies. The product offers an automated and accessible decentralized savings experience.
→ For further reading, see the full presentation of Euler Earn:
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Designed for non-technical users and passive investors, Euler Earn aggregates deposited liquidity and automatically reallocates it toward the best-performing Euler markets, under the supervision of multiple independent asset managers, including the Euler DAO itself.
Only one month after launch, traction is already strong. TVL exceeds 110 million dollars on Ethereum and more than 510 million on Plasma, confirming market demand for simplified, high-performing DeFi products. Euler Earn is quickly becoming a major growth driver for the broader Euler ecosystem.
$EUL Token Analysis
EUL is Euler’s governance token. Its maximum supply is fixed at 27,182,818 EUL which is a nod to mathematician Leonhard Euler and his famous constant e (≈ 2.7182818). As of today, more than 19.8 million EUL tokens are in circulation, representing roughly 73 % of the total supply. Full token release is scheduled for January 1, 2026, less than three months away.
Where things become particularly interesting is in the evolution of EUL’s trading activity. Trading volume has surged by more than 46 percent since Q2, reaching approximately 386 million dollars over the quarter, extending the bullish trend that began earlier this year.
Between Q1 and Q3 2025, total traded volume more than doubled, up 123%, signaling growing market interest in gaining exposure to Euler’s expanding ecosystem. This momentum is mirrored by the increase in the number of token holders, which also rose steadily by 24% during Q3, from roughly 3,300 to over 4,100 unique addresses.
One might assume this growth in holders stems purely from price appreciation, but the data suggests a more nuanced picture. While EUL’s price appreciated slightly early in Q3, summer volatility erased part of those gains. Yet, the number of holders continued to increase steadily.
This suggests that the underlying driver is not short-term speculation, but rather fundamentals: the buyback mechanism, growing protocol revenues, and overall adoption. In other words, the rise in EUL ownership reflects a long-term belief in the sustainability of the protocol’s economic model, a constructive signal for its future resilience.
Key Events for Euler during Q3 2025
Among the quarter’s highlights, two announcements stand out. First, the public launch of Euler Earn, discussed earlier, and second, a series of critical governance votes regarding the activation of fees across Euler Lending.
Up until now, most vaults on the main market, Euler Prime, already applied a 10% protocol fee. However, to maximize TVL and attract liquidity, the three largest markets (USDC, USDT, and wETH) had remained exempt.
Extending fees to these key markets could raise annual revenues by approximately +381%, marking a turning point in Euler’s monetization strategy. This topic was discussed in a governance proposal in July.
A similar logic applies to Euler Yield, the layer dedicated to yield strategies, where no fees were yet charged on the most borrowed assets. As discussed in another governance proposal, introducing a 5-10% fee on these markets could generate between 1.25 and 2.5 million dollars in additional annual revenue for the DAO.
These projections, developed by Objective Labs, a key Euler Labs partner for risk management and growth, formed the basis of the governance vote held early in the quarter. The community was presented with three options:
- Activate fees following Objective Labs’ recommendation
- Maintain the status quo
- Delegate full fee management authority to Objective Labs
Although the first proposal won the majority vote, it failed to pass due to insufficient quorum. A month later, a new proposal was submitted and this time, quorum was comfortably reached. Governance voted to transfer full operational control of fee management to Objective Labs.
In the short term, this operational centralization aims to accelerate the implementation of revenue mechanisms and allow greater agility in future adjustments, while maintaining DAO oversight through on-chain governance.
In practice, this decision translated into a 10% fee on the Euler Yield layer, and a default 10% fee on Euler Prime, initially targeting stablecoin-backed vaults.
Extending this dynamic, a new yield market was launched on Arbitrum at the end of summer, showcasing Euler’s intent to diversify revenue sources while expanding its multichain footprint. This market, fully dedicated to stablecoins, is governed directly by the DAO, while risk management is jointly handled by Gauntlet and Objective Labs.
As of this report, the Arbitrum Yield Market, live for just 37 days, has already accumulated over 50 million dollars in deposits.
Finally, at the end of September, a particularly notable market went live: the Sentora RLUSD Market, operated by Sentora (formerly IntoTheBlock), also known as The Institutional DeFi Layer, an entity focused on DeFi and RWA services for institutional clients.
Deployed on Ethereum and backed by Ripple’s RLUSD stablecoin, collateralized by U.S. Treasury bills, the market experienced rapid growth, exceeding 225 million dollars in deposits within just a few days.
This is a remarkable achievement; some blockchains never reach such TVL levels even after months of existence. Yet here, it represents just one new segment among Euler’s expanding suite of markets.
→ For a full overview of Euler’s product strategy (Vaults, Earn, Swap, Markets), read:
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Founder Interview with Michael Bentley
During Q3 2025, Michael Bentley, CEO and co-founder of Euler Labs, made several public appearances to support the protocol’s growing institutional visibility.
Two interviews stand out for their clarity and depth. The first was given in early September on the Epicenter podcast, and the second, titled “Institutional DeFi Adoption and the Future of On-Chain Finance”, took place on The Future of Money with Henri Arslanian (link).
These conversations offer a comprehensive perspective on both the technological and philosophical evolution of Euler since the 2023 hack, as well as its gradual integration into the institutional finance landscape.
Euler’s success
According to Bentley, Euler’s success (its rapid TVL growth and expansion in user activity) primarily stems from institutional adoption. He identifies two key factors behind this structural shift:
- Regulatory normalization, with initiatives such as the Genius Act in the U.S. and MiCA in Europe, which, despite their critics, provide clarity and remove major uncertainties.
- The rise of tokenization and RWAs (Real World Assets), exemplified by BlackRock’s Build fund on Ethereum.
To contextualize the trend, tokenized funds have more than doubled since the beginning of 2025 with a +100% growth in less than a year. The final piece of the institutional puzzle, Bentley notes, is the widespread adoption of stablecoins as a payments rail, a natural engine of liquidity. As he explains:
“As more and more people start using stablecoins, many will inevitably turn to DeFi, where yield opportunities naturally exist.”
For Bentley, this marks a paradigm shift: DeFi is no longer just an experimental lab, but an emerging institutional money market built on regulated and interoperable assets.
Beyond tokenization and capital inflows, Bentley insists on a deeper structural transformation:
“Fintechs and other centralized players are starting to use DeFi as backend infrastructure, sometimes without end users even realizing it.”
Euler fits perfectly into this narrative. The protocol is no longer just a lending app, but a foundational liquidity layerupon which fintechs and institutions can build, accessing decentralized liquidity while abstracting away Web3 complexity for end users.
This, Bentley argues, is the natural path to mass adoption: an “invisible” yet essential DeFi, serving as the silent backbone of the emerging digital financial system.
Security and Institutional Trust
When asked about security, often cited as the main barrier to institutional adoption, Bentley draws a sharp distinction between traditional finance and DeFi. Traditional finance, he argues, relies on security through obscurity, where trust is derived from opacity and restricted access.
DeFi, in contrast, operates through open, verifiable code, where transparency and collective auditability form the foundation of trust. This model, according to Bentley, produces an antifragile financial system, one that grows stronger through public scrutiny and iterative improvement.
The Rise of Fixed-Rate Lending in DeFi
Another major point Bentley raised concerns the evolution of DeFi lending markets toward fixed-rate products. So far, most DeFi lending has operated with floating rates: efficient for lenders, but risky for borrowers engaged in carry trades (borrowing at rate X to lend at rate Y and capture the spread).
Bentley believes this model has reached its limits. Institutional borrowers, he says, increasingly demand predictable borrowing costs, even at the expense of slightly higher rates.
“Borrowers are getting frustrated with variable rates. They’re willing to pay a small premium for predictability.”
He anticipates that fixed-rate debt instruments will soon dominate the decentralized lending landscape, bridging DeFi and traditional credit standards.
Convergence of DeFi and TradFi
Looking ahead, Bentley envisions a decade-long convergence between the two worlds. The boundary between DeFi and TradFi will gradually fade, with DeFi becoming the technical and operational substrate upon which traditional finance runs.
In his view, this integration won’t happen through a single event but through progressive adoption, product by product, use case by use case, until decentralized rails become an invisible part of global finance.
Outlook for Q4 and 2026
Although Euler has not yet published an official roadmap for 2026, several trends outlined in this report allow us to project plausible scenarios for the protocol’s evolution over the coming months.
First, the multichain expansion is expected to continue as new mature ecosystems emerge, similar to what happened with Plasma in 2025. Euler’s modular architecture, based on ERC-4626 vaults and the EVC-EVK stack, is naturally suited for deployment across chains, and the DAO has repeatedly expressed its intention to scale through composable, chain-agnostic modules.
In parallel, the introduction of fixed-rate lending products could become a strategic priority. Aave had previously explored this direction before suspending the feature due to security considerations. Today, with improved rate modeling, oracle infrastructure, and broader risk understanding, the technical and economic conditions appear far more favorable.
The first prototypes of functional fixed-rate markets already exist, notably with Liquity V2, suggesting how this model could be implemented securely within Euler’s architecture. Such instruments would not only enhance borrower predictability but also align the protocol with institutional risk standards.
Another foreseeable vector of growth is the acceleration of asset tokenization and the integration of RWAs (Real World Assets) into Euler’s markets. This could take the form of lending against tokenized bonds or treasury-backed stablecoins, or using RWA collateral to support on-chain credit strategies. These assets typically offer native, predictable, and sustainable yields, making them highly attractive for both individual users and institutional participants.
At the same time, the DAO’s monetization framework should continue to expand across the protocol’s various products (Euler Prime, Frontier, Swap, and Earn). A unified fee model would strengthen Euler’s internal economy by ensuring sustainable revenue streams, self-financing capacity, and stable operational budgets.
This transition marks the beginning of a new phase for Euler: moving from expansion to economic consolidation. The protocol is progressively evolving from a high-growth, innovation-driven ecosystem toward a mature, revenue-generating financial infrastructure.
Conclusion
Euler enters the final stretch of 2025 in a position of strength. In just twelve months, the protocol has gone from a “technical comeback” to a structural leader in modular lending, demonstrating that a rigorous, composable, and DAO-governed approach can rival legacy architectures.
The figures are compelling: consistent TVL growth, rapidly increasing revenues, a growing user base, and a governance model capable of managing a coherent internal economy.
Beyond the metrics, what stands out is the maturation of Euler’s model. The protocol is no longer just a lending platform but a complete ecosystem, a modular and interoperable infrastructure designed to serve both individual users and institutions.
Signals observed during Q3 2025 reinforce this trajectory. The expansion across multiple chains, the rise of sustainable revenue models, the growing popularity of simplified products like Euler Earn, and the alignment with top-tier partners all point toward a clear direction: Euler is positioning itself as a long-term backbone for modular credit markets on Ethereum and beyond.
2026 is likely to extend this trajectory. The potential introduction of fixed-rate markets, greater integration of tokenized assets, and the full activation of DAO-managed fee structures will mark Euler’s transition into a phase of economic maturity and operational sustainability.
At that stage, the protocol’s goal will no longer be solely to grow but to solidify its role as a foundational layer of decentralized finance, an infrastructure that, in three years, has become one of the most complete expressions of resilience, transparency, and technical excellence in DeFi.
