Earning Interest-Bearing ERC20 eTokens with Michael Bentley

The DIVI Crypto Podcast

In this episode of The DIVI Crypto Podcast, we are talking with Michael Bentley, CEO and Co-Founder of Euler. Euler is a non-custodial protocol on Ethereum that allows users to lend and borrow almost any crypto asset. Euler is a platform that allows users to determine which assets are listed. In order to do this, Euler uses Uniswap v3 as a core dependency. If an asset has a WETH pair on Uniswap v3, it can be included in a lending market on Euler by anyone. Permissionless listing is riskier on decentralized lending protocols than on other DeFi protocols, like decentralized exchanges, with the potential for risk to spill over from one pool to another in quick succession. To offset these obstacles, Euler uses risk-based asset tiers to keep the protocol and its users safe. Isolation-tier assets are open for lending and borrowing, but cannot be used for collateral to borrow other assets, and they can only be borrowed in isolation. Cross-tier assets are for standard lending and borrowing, but can’t be used as collateral to borrow other assets, but may be borrowed alongside other assets. Collateral-tier assets are available for ordinary lending and borrowing, cross-borrowing, and they can be used as collateral. EUL hodlers can vote to move assets from the isolation-tier and promote them to the cross-tier or collateral-tier via governance mechanisms. When lenders deposit into a liquidity to an Euler pool, they earn interest-bearing ERC20 eTokens, to be redeemed for their share of the underlying assets in the pool at any time, provided there are unborrowed tokens in the pool. Borrowers take liquidity from a pool and return it with interest. By doing so, the total assets in the pool grow. This way, lenders earn interest on assets they supply, because their Tokens can be redeemed for an increasing amount of the underlying asset. Rather than providing non-standard ways of transferring debts, Euler uses the standard transfer and approve ERC20 methods. However, the logic is reversed. Instead of being able to send tokens to anyone, but requiring approval to take them, dTokens can be taken by anyone, but require approval to accept them. Euler permits collateral to be deposited, but is not available for lending. The collateral is “protected.” It earns the user no interest, but is free of risks of borrowers defaulting, has the option to be withdrawn instantly, as well as helps protect against borrowers using tokens to influence governance decisions. Euler doesn't have a native concept of flash loans. With Euler, one can defer their liquidity check, make an uncollateralised borrow, perform whatever operation they like, and then repay the borrow. This can be used to rebalance positions, build-up leveraged positions, take advantage of external arbitrage opportunities, and more. https://www.euler.finance https://twitter.com/eulerfinance https://discord.gg/CdG97VSYGk https://t.me/eulerfinance_official https://www.linkedin.com/company/euler-xyz -- DIVI is creating the world's first closed-loop, vertically-integrated cryptocurrency ecosystem. Much like Apple's ecosystem is anchored by iCloud, the DIVI Project blockchain serves as the core of the DIVI network of technologies. Thanks to a keen understanding of the divide that separates the mainstream from the crypto world, the DIVI team is able to create solutions to the industry's biggest problem: adoption by non-technical users. DIVI's user-friendly, one-click solutions aim to bring blockchain-based payments into modernity with great UX. In this podcast, we will cover all aspects of cryptocurrency, hot topics, and technology as worldwide adoption grows.