Author: Euler Labs
Date: September 19, 2025
Summary
This proposal sets out a framework for how Euler DAO should manage DAO vaults across supported networks. Earn vaults non-custodial ERC-4626 meta-vaults that aggregate user deposits into curated vaults on Euler.
We propose a layered structure of DAO oversight, responsibilities, and limited emergency controls to balance:
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Efficiency (timely yield optimization),
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Risk management (supply caps, queue mechanics, and isolated strategy risk), and
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Community governance (DAO retains ultimate ownership).
Motivation
With the launch of Earn, Euler DAO may run a new category of vaults beyond the isolated lending markets. While the vault contracts themselves are ERC-4626 compliant and risk-isolated, their performance and safety depend on allocations, caps, and queue design.
The DAO must therefore define clear management principles:
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Who can propose and execute changes to Earn vault configurations (allocations, caps, whitelisted strategies).
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What risk safeguards must always be in place.
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How rapid response can be enabled in the event of misconfiguration, market stress, or third-party dependency failure.
Without a framework, Earn risks becoming under-managed (yield inefficiency) or over-exposed (risk mismanagement).
About Euler Earn
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Structure: Depositors supply one asset → receive ERC-4626 shares.
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Mechanics: The vault allocates across underlying Euler lending vaults.
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Risk isolation: Each allocation enforces supply caps; queue mechanics prevent overexposure.
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Objective: Optimize yield while preserving per-strategy isolation and aligning with DAO’s broader risk philosophy.
Governance & Oversight
We propose that the DAO acts as the owner and curator of the Euler Earn vaults:
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Vault deployments are executed by Euler DAO.
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Accepted strategies & supply caps are ultimately under DAO control.
We propose that Objective Labs act as the advisor to the DAO on:
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Accepted strategies.
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Supply caps.
The advisor operates in an optimistic governance framework:
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Changes to Earn accepted strategies or caps are published on the forum.
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A timelock (e.g. 48h) applies before execution, unless revoked by the DAO or guardians.
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The community retains the ability to contest misaligned changes.
We propose that Euler Labs acts as a guardian and allocator allowing it to:
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Define the supply and withdrawal queue order.
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Rebalance the assets amongst the DAO accepted strategies within defined supply cap constraints.
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Revoke pending changes to the Earn vault.
Specification
Owner: DAO multisig
Curator: None. DAO advised by Objective Labs
Guardian: Euler Labs multisig
Allocator: Euler Labs multisig, Rebalancing bot
Timelock: 48h
Euler DAO invites feedback on this framework.
Disclosures & Copyright
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Author: Euler Labs.
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Copyright waived under CC0.