Summary
Objective has analyzed the revenue potential downstream of enabling fees across Euler DAO’s markets. The data suggests a more selective strategy for the fee switch is optimal to balance DAO revenue with staying competitive in the current market dynamics.
Methodology
We estimate potential annual revenue by taking the current total borrows across Euler DAO’s vaults and taking the rate at kink. This method is a snapshot of the current state and is not a projection. Interest rates (especially those for stablecoins) may change depending on market conditions, and thus the actual revenue may be higher or lower than estimated. We believe that enabling fees in some vaults may lead to detrimental effects across the encompassing market that the additional fee revenue does not outweigh.
Euler Prime
In Euler Prime, most borrowable vaults already have a 10% protocol fee enabled. However, USDC, USDT, and WETH, three of the most active vaults, still operate at 0%. If a fee is introduced for these vaults, it would significantly boost protocol revenue.
Applying a 10% fee across all markets (including USDC, USDT, and WETH) would raise estimated annual revenue to $552,841, up from the current $114,926—a 381% increase. Alternatively, a more gradual rollout with a 5% fee on the top three assets would still lift total revenue to $333,883, a 190% increase over current levels.
Providing both 5% and 10% options gives the DAO flexibility to balance revenue growth with market stability.
5% Fee Option
Benefits
• Adds ~$219K in new revenue, bringing the total to ~$334K/year
• Minimal impact on lender APYs, preserving current yield structure
• Lower risk of affecting utilization or borrowing behavior
• Good testing ground to evaluate market sensitivity
Trade-offs
• Captures only part of the revenue potential
• May require follow-up governance action to scale to 10%
10% Fee Option
Benefits
• Maximizes protocol revenue (~$553K/year)
• Aligns fee structure across all Prime assets
• Strengthens protocol sustainability and treasury funding
Trade-offs
• Reduces lender APYs by 10%, potentially impacting supply
• May lead to shifts in borrowing or liquidity to other platforms
• Needs coordinated communication to prevent user churn
Current annualized revenue
| Market |
Asset |
Total Borrowed USD |
Interest Fee |
Borrow APY (at kink) |
Revenue (10% Fee) |
| Euler Prime |
USDtb |
$9.80M |
10% |
5.5% |
$53,900 |
| Euler Prime |
RLUSD |
$7.26M |
10% |
5.5% |
$39,930 |
| Euler Prime |
WBTC |
$5.41M |
10% |
1.0% |
$5,410 |
| Euler Prime |
cbBTC |
$9.66M |
10% |
0.6% |
$5,796 |
| Euler Prime |
rsETH |
$2.15M |
10% |
4.6% |
$9,890 |
Annualized revenue if fees are enabled
| Market |
Asset |
Total Borrowed USD |
Interest Fee |
Borrow APY (at kink) |
Revenue (5% Fee) |
Revenue (10% Fee) |
| Euler Prime |
WETH |
73.85M |
0% |
2.6% |
$96,005 |
$192,010 |
| Euler Prime |
USDC |
29.09M |
0% |
5.5% |
$79,997.50 |
$159,995 |
| Euler Prime |
USDT |
15.62M |
0% |
5.5% |
$42,955 |
$85,910 |
Euler Yield
Euler Yield has 0% interest fees across the most utilized borrowable assets. However, enabling a 5% or 10% fee on the top 7 high-borrow markets is estimated to generate $1.25M (5%) to $2.5M (10%) in annual revenue, based on borrow APYs at kink. This represents a significant increase from zero revenue.
Offering both fee options allows for gradual implementation, giving the DAO a way to balance revenue generation with potential market impact.
5% Fee Option
Benefits
• Lower impact on lender APYs, less likely to cause disruption
• Generates meaningful revenue ($1.25M per year)
• Allows us to test market response before scaling
• Easier to justify from a governance and user perspective
Trade-offs
• Only captures half of the revenue potential
• May require a follow-up adjustment or second vote
• May appear overly cautious despite strong utilization
10% Fee Option
Benefits
• Captures full revenue opportunity ($2.5M per year)
• Aligns with existing fee levels applied to smaller borrowable assets
• Helps fund long-term protocol sustainability and treasury
Trade-offs
• Stronger reduction in lender APYs
• May cause liquidity to shift if rates become uncompetitive
• Requires careful messaging to avoid negative sentiment
Annualized revenue if fees are enabled
| Market |
Asset |
Total Borrows |
Interest Fee |
Borrow APY (at kink) |
Revenue (5% Fee) |
Revenue (10% Fee) |
| Euler Yield |
USDC |
$167.82M |
0% |
7.5% |
$629,325 |
$1,258,650 |
| Euler Yield |
USDT |
$6.26M |
0% |
7.5% |
$23,475 |
$46,950 |
| Euler Yield |
RLUSD |
$125.53M |
0% |
7.5% |
$470,737.50 |
$941,475 |
| Euler Yield |
wM |
$2.33M |
0% |
7.5% |
$8,737.50 |
$17,475 |
| Euler Yield |
USDe |
$1.65M |
0% |
7.5% |
$6,187.50 |
$12,375 |
| Euler Yield |
eUSDe |
$24.85M |
0% |
7.0% |
$86,975 |
$173,950 |
| Euler Yield |
rUSD |
$6.06M |
0% |
7.0% |
$21,210 |
$42,420 |
Euler Unichain
Euler Unichain currently has a 10% fee applied to its major markets, including WETH, USDC, and USDT0. Based on borrow APYs at kink, the estimated annual revenue from these three assets totals approximately $422,298. This reflects the fee income potential assuming full utilization up to the kink rate.
| Market |
Asset |
Total Borrows |
Interest Fee |
Borrow APY (at kink) |
Revenue (10% Fee) |
| Euler Unichain |
WETH |
$19.34M |
10% |
2.7% |
$52,218 |
| Euler Unichain |
USDC |
$50.33M |
10% |
6% |
$301,980 |
| Euler Unichain |
USDT0 |
$11.35M |
10% |
6% |
$68,100 |
Euler Base
Euler Base currently does not charge any interest fees. If a 5% fee is applied to the two main borrowable assets, WETH and USDC, the protocol could generate an estimated $13,837 annually. Increasing the fee to 10% would double this to approximately $27,674. This provides a potential new revenue stream while still maintaining relatively modest borrower costs.
| Market |
Asset |
Total Borrows |
Interest Fee |
Borrow APY (at kink) |
Revenue (5% Fee) |
Revenue (10% Fee) |
| Euler Base |
WETH |
$4.26M |
0% |
2.4% |
$5,112 |
$10,224 |
| Euler Base |
USDC |
$3.49M |
0% |
5% |
$8,725 |
$17,450 |
Euler Arbitrum
Euler Arbitrum has already implemented a 10% fee on major assets like USDC and USDT0. Based on current borrow APYs at kink, the estimated annual revenue from these two markets is approximately $176,820. This reflects a solid yield from high-demand assets under the current fee structure.
| Market |
Asset |
Total Borrows |
Interest Fee |
Borrow APY (at kink) |
Revenue (10% Fee) |
| Euler Arbitrum |
USDC |
$16.44M |
10% |
6% |
$98,640 |
| Euler Arbitrum |
USDT0 |
$13.03M |
10% |
6% |
$78,180 |
Recommendations
| Market |
Status |
Current Revenue |
Revenue @ 5% Fee |
Revenue @ 10% Fee |
Recommendation |
| Euler Prime |
Partial (some 0%) |
$114,926 |
$333,883 |
$552,841 |
10% fee on stablecoin vaults |
| Euler Yield |
All at 0% |
$0 |
$1,246,647.50 |
$2,493,295 |
10% fee on all vaults |
| Euler Unichain |
All at 10% |
$422,298 |
– |
$422,298 |
No change |
| Euler Base |
All at 0% |
$0 |
$13,837 |
$27,674 |
No change |
| Euler Arbitrum |
All at 10% |
$176,820 |
– |
$176,820 |
No change |
Based on the current snapshot, Euler DAO’s markets bring an annualized revenue of $714K. Most of this comes from markets where a 10% protocol fee is already enabled (e.g. Unichain and Arbitrum).
- The biggest revenue opportunity is Euler Yield where a 10% interest fee results in additional revenue of $2.5M. We estimate that the fee switch is unlikely to spur major outflows.
- We recommend a moderate strategy for Euler Prime with a 10% interest fee on stablecoin vaults and 0% on WETH. LST/LRT loopers (which represent >90% of current borrowers) are highly sensitive to rates, and outflows can be expected, whereas the revenue potential is comparatively small.