Cours de Euler

Euler is a non-custodial permissionless lending protocol on Ethereum that helps users to earn interest on their crypto assets or hedge against volatile markets without the need for a trusted third-party.

When lenders deposit into a liquidity pool on Euler, they receive interest-bearing ERC20 eTokens in return, which can be redeemed for their share of the underlying assets in the pool at any time, as long as there are unborrowed tokens in the pool (similar to Compound's cTokens). Borrowers take liquidity out of a pool and return it with interest. Thus, the total assets in the pool grows through time. In this way, lenders earn interest on the assets they supply, because their eTokens can be redeemed for an increasing amount of the underlying asset over time. 

Euler lets its users determine which assets are listed. To enable this functionality, Euler uses Uniswap v3 as a core dependency. Any asset that has a $WETH pair on Uniswap v3 can be added as a lending market on Euler by anyone straight away. Euler divided cryptocurrencies in to three tiers based on their risks, differing in whether they can be used as collateral and whether they can be borrowed in isolation.  $EUL holders can vote to liberate assets from the isolation-tier and promote them to the cross-tier or collateral-tier through governance mechanisms. Promoting assets up the tiers increases capital efficiency on Euler because it allows lenders and borrowers to use capital more freely, but it may also expose protocol users to increased risk. It is therefore in $EUL holders' interests to balance these concerns.