Author: Euler Labs
Date: 2025-08-07
Summary
Euler is officially deploying on Linea Mainnet. Linea is a type 2 zero knowledge Ethereum Virtual Machine (zkEVM). A zkEVM replicates the Ethereum environment as a rollup.
The Euler market on Linea will establish dedicated lending and borrowing facilities for blue chip assets to facilitate common trades like blue chip lending, stablecoin borrowing, and LST/LRT looping. This market positions Euler as a key competitor in the lending landscape on Linea while supporting key DEX pairs through EulerSwap.
Specification
New Potential Assets
- Assets: Renzo ETH, WETH, EtherFi ETH, USDC, WBTC, USDT, Wrapped Staked ETH, DAI, USDe, Kelp ETH, EURe
Risk Management
Euler Linea will be governed by Euler DAO and risk-managed by Gauntlet and Objective Labs. Euler Labs invites Gauntlet and Objective Labs to provide initial recommendations for risk parameters for the Euler Linea market.
Copyright
Copyright and related rights waived via CC0.
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[Objective Labs] Initial Parameters for Euler Linea Markets
Summary
Objective Labs recommends initial support for a core set of assets: ezETH, weETH, wstETH, wrsETH, WETH.
To improve risk isolation and align with early liquidity conditions, LSTs will be isolated in self-contained markets.This structure allows for targeted risk management per asset while offering ETH-native borrowing strategies. A key objective is to limit tail risk due to insufficient liquidity.
Liquidity
Assets demonstrate solid growing onchain liquidity on Linea:
- ETH → USDC: 400 ETH incurs ~0.95% slippage.
- wstETH → WETH: 1700 wstETH incurs ~1.36% slippage.
- weETH → WETH: 1300 weETH incurs ~0.95% slippage.
- ezETH → WETH: 1000 ezETH incurs ~0.92% slippage.
- wrsETH → WETH: 1300 wrsETH incurs ~0.75% slippage.
- USDC & USDT:
- USDC: ~18.2M supply, 506K+ holders
- USDT: ~4.7M supply, 226K+ holders
Due to low liquidity in stablecoins, we recommend deploying vaults for USDC, USDT, DAI, USDe, EURe at a later date.
Structure
We propose initially establishing 4 isolated markets. Each market will have two vaults, (LST) and WETH. Bidirectional borrows will be enabled for EulerSwap.
- Euler Linea wstETH
- Euler Linea weETH
- Euler Linea ezETH
- Euler Linea wrsETH
In the following tables “(LST)” denotes the LST asset for the respective market.
LTVs
| Collateral |
Debt |
LLTV |
OLTV |
| (LST) |
WETH |
95% |
94% |
| WETH |
(LST) |
93% |
92% |
Caps
| Market |
Asset |
Supply Cap |
Borrow Cap |
| Euler Linea wstETH |
wstETH |
10000 |
5000 |
| Euler Linea weETH |
weETH |
5000 |
2500 |
| Euler Linea ezETH |
ezETH |
5000 |
2500 |
| Euler Linea wrsETH |
wrsETH |
5000 |
2500 |
| (All Markets) |
WETH |
20000 |
- |
IRMs
| Market |
Asset |
Base rate |
Kink |
Rate at kink |
Rate at max |
| (All Markets) |
WETH |
0% |
90% |
2.7% |
8% |
| (All Markets) |
(LST) |
0% |
50% |
2% |
12% |
We recommend a standard 10% interest fee on all vaults.
Oracles
We recommend using WETH as the unit of account, or alternatively, the Chainlink ETH/USD as a cross oracle for all markets and vaults.
| Asset |
Price Feed |
| WETH |
- |
| ezETH |
Chainlink ezETH/ETH (Fundamental) |
| weETH |
Chainlink weETH/ETH (Fundamental) |
| wstETH |
Chainlink wstETH/ETH (Fundamental) |
| wrsETH |
- |
Note: wrsETH has no active price feed. We recommend delaying whitelisting of Euler Linea wrsETH until a suitable push oracle is deployed and configured.
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Summary
We discussed this with Euler Labs last week. Gauntlet supports Objective Labs’ initial parameter recommendations, with the caveat that the existing DeRisk AutoStrategy will govern supply/borrow caps. Beginning 45 days after market launch, caps will be reviewed and adjusted based on observed demand and liquidity.
Rationale
Caps: Objective Labs’ proposed caps are relatively aggressive compared with current DEX liquidity on Linea (ETH and LST pairs). To support early growth, we align with launching higher caps; however, if demand does not materialize as expected, we will proactively reduce caps in accordance with the existing derisking automation strategies set in place.