Euler, a money market, sold $32 million of its governance token at a valuation of $375 million to a group of investors led by Haun Ventures, providing the project treasury with stablecoins to build a reliable pool of resources as the crypto market becomes calmer.
Why is this important: Decentralized finance promises to reduce financial friction for everyone, and Euler focused on making it easy for people to borrow all kinds of tokens.
- Previous tech booms have shown that making life a little easier for lots of people can bring big business and lots of value.
What they say : “I guess the sea change is ultimately that the existing money market protocols basically act as gatekeepers,” Michael Bentley, CEO of Euler XYZ, the company behind the Euler protocol, told Axios.
What he does: Users can deposit top-notch cryptocurrencies on Euler and borrow a wide range of tokens that run on Ethereum, all in the open, permissionless way of blockchains.
- It is designed so that anyone can list any token to lend on Euler.
- For higher-level functions, such as serving as collateral for loans, a token must gain approval from Euler’s governance token holders. Only eight crypto assets have been approved so far.
- “There’s not too much you can borrow against” on Euler or in the real world either, Bentley said. Collateral is reserved for very high quality assets that the market understands well, such as precious metals and real estate.
Founder of Haun Ventures Katie Haun, formerly both a DoJ prosecutor and a general partner at Andreessen Horowitz, said in a statement. “Euler takes a unique approach to dealing with the risks associated with lending and borrowing crypto assets that we found to be exemplary in DeFi.”
How it works: Investors bought EUL, Euler’s money market governance token. This token allows them to vote on cash spending, protocol changes, permissions for different tokens and also the amount of new token rewards to be given to newly admitted token depositors.
By the numbers: There is currently over $200 million committed to Euler, according to DefiLlama. The funds committed to it have more than doubled this month.
- The total supply of EULER tokens is 27,182,818. Of this, 24.75% was for Euler XYZ staff and contractors.
- Investors bought 26.2% of the total supply. Tokens purchased by previous and new investors are time-locked, unlocking continuously over 18 months, starting January 1, 2022.
The EUL token is not yet active.
In the weeds: Other investors included Variant, FTX Ventures, Coinbase Ventures, Jump Crypto, Uniswap Labs and others.
What we are looking at: Euler is gradually decentralizing, gradually ceding control of the protocol from the nonprofit foundation that now manages it to Euler DAO, the community of everyone who holds EUL tokens.