🏛️ Request for a Formal Governance Proposal Regarding Compensation for Users Affected by the Elixir and Steam Labs Collapse

Euler DAO
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Dear @Euler team and governance community,

First, thank you for your continued transparency and dedication to maintaining the integrity of the Euler ecosystem.
However, there are several unresolved concerns regarding the Elixir and Steam Labs incidents, which have led to significant financial losses for some Euler users and partners.

This post aims to request that the Euler core contributors or an authorized delegate initiate a formal DAO proposal and structured discussion on this matter.

:one: DAO Governance vs. Unilateral Decisions

Euler operates as a DAO where EUL token holders govern treasury management and key protocol parameters.
Yet, to date, the community has not been given the opportunity to vote on whether the Euler Treasury should play any role in addressing the impact of the Elixir and Steam Labs collapse.

I respectfully request that the team or a delegate create a formal governance proposal (on Snapshot or Tally) presenting multiple options such as:

  • Option A: No compensation (current default stance)

  • Option B: Partial compensation funded by the Euler Treasury (e.g., 25–50% haircut)

  • Option C: Creation of a dedicated recovery pool funded by future protocol revenues or incentives

  • Option D: Token-based relief mechanism (e.g., vested EUL distribution to affected users)

Let EUL holders decide through governance, rather than unilateral team decisions.

:two: Reputation Risk and Community Trust

Even if Euler bears no legal liability for the failures of Elixir or Steam Labs, the reputational risk and user confidence impact are undeniable.

If this situation remains unaddressed, it risks:

  • Loss of trust and long-term user retention

  • Reduced protocol credibility versus peers like Aave, Compound, or Morpho

  • Continuous association of Euler with the Elixir/Steam incidents in DeFi discussions

The key question isn’t “Are we legally liable?” — it’s “Can Euler maintain its reputation without proactive action?”

Taking initiative, even for partial or symbolic compensation, would demonstrate strong leadership and uphold Euler’s image as a community-first protocol.

:three: Transparency and Communication

If legal recovery actions or negotiations related to Elixir/Steam Labs are ongoing, I strongly suggest implementing a public transparency framework:

  • Bi-weekly updates on the recovery process and legal actions (posted in the forum or Discord)

  • A status dashboard summarizing affected funds, recovery progress, and next steps

  • Open data on any recovered assets or settlements

Transparency builds community confidence — regardless of the outcome.

:four: Clarity on Affected Markets and Users

If specific Euler-integrated markets or users were directly affected, the DAO should publish clear and verifiable information:

  • List or reference of affected addresses and markets

  • Estimated shortfall amount (to guide compensation discussion)

  • Proposal for a Merkle-claim or verifiable system for eligible users (if compensation is approved)

This would ensure accountability and fairness in any potential recovery process.

:five: Turning a Crisis Into a Governance Example

The DeFi community respects protocols that acknowledge issues and let governance decide how to handle them.

This is an opportunity for Euler to lead by example, not by assigning blame, but by showing that decentralized governance can handle crises transparently and fairly.

Even a limited or symbolic compensation plan (for example through vested or staked EUL tokens) could significantly strengthen community confidence and long-term brand reputation.

:white_check_mark: Summary and Request

I respectfully ask that the Euler team or an authorized governance delegate:

  1. Create a formal DAO proposal for the community to vote on, offering structured options for how Euler should respond to the Elixir / Steam Labs situation.

  2. Initiate an open discussion thread (RFC) in this forum to collect feedback and refine proposal options before the vote.

I, along with other affected or concerned users, am happy to assist in drafting, data collection, and community coordination.

Thank you for your time, transparency, and commitment to community-led governance.

24 Likes
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This is a fantastic proposal. Thank you for writing this.

It’s professional, fair, and hits every important point. I 100% support bringing this to a formal vote. This is exactly what the DAO is for.

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I fully support and agree with all the proposals — this is an excellent example of finding balanced compromises. I sincerely hope that Euler values its reputation, as it’s precisely in situations like this that the protocol’s trust and long-term future are truly tested.

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Total understanding, hope something good is going to happen to affected users. It should have been everyone ..

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I 100% support bringing this to a formal vote. This is exactly what the DAO is for.

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Really good post! Totally agree — let the DAO vote on this. Hope the community steps up and does the right thing for affected users!

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Fully support this proposal — transparency and community governance are essential for restoring trust after the Elixir/Steam incidents. Allowing EUL holders to decide on a fair path forward would show real accountability.

5 Likes
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Thank you for the proposal. Something should be done obviously.

P.S. Please, edit: not Steam Labs, but Stable Labs.

5 Likes
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I fully support the proposal.

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I’ve been affected by the collapse with low five figures on Re7 Capital vaults, so obviously I am biased towards getting a compensation, but I believe that Euler going through with something similar to what is proposed above, even if symbolic, could have a really positive effect long term. Everyone is blaming eachother, no one believes they’re at fault, curators are ignoring lenders, so it is a tough situation for a lot of people, especially those who may have lost life changing amounts.

While I don’t think that Euler had a substantial play in how everything unfolded, it happened on Euler’s platform, so it’s going to affect it one way or another. I believe reaching an agreement with the curators, platforms, and bankruptcy proceedings of the real bad actors, to try and compenstate the affected lenders as much as possible would be the way to go, even if it’s platform tokens, locked tokens, etc.

Euler could also implement UI changes to clearly warn users about things like fixed oracle prices, not allowing oracle prices from one token to represent another tokens price, check for low liquidty on tokens that can be used as collateral, and other security measures to prevent something like this from happening again.

Everyone has learned from what has happened, but the future of the different platforms involved will be determined by the actions taken to compensate/help (or not) those who were severely affected.

5 Likes
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Well said. I hope this post will get the traction and official response it deserves.
I completely agree with your point: this is a matter for DAO governance. EUL holders should have the opportunity to vote on a formal proposal.

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Nice commitment

Lets do it!

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This should be brought to a DAO vote. If the curator-model is going to be viable moving forward, some action, or at least a vote about the action, needs to happen.

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I fully support and agree

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I fully support this proposal and recommend we put it to a vote immediately.

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I fully support it.

When something like this happens on a platform, you can’t act like you have nothing to do with it.

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承担更多责任会让企业变得更强大。此时此刻如何对待客户，以及未来客户将如何对待企业，我们现在如同杂草，但最终会因为这个平台而长成参天大树。

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Strongly support some kind of actual analysis of any projects that have done this in the past before going to any kind of vote.

Generally, take a very dim view of any smash-and-grab treasury policy.

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100% agree with proposal
and should do all vault in Re7 too!
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What’s the point of a Risk Curator if they don’t manage risk?
Re7 charged 10-20% performance fees but did nothing when xUSD’s LTV dropped below 80–90%.
Now thousands of users face bad debt — and the team stays silent.

We are not expecting full recovery.
Most users are willing to accept haircut.
But what we truly expect is responsibility, transparency, and progress.
Please come forward, communicate with the community to resolve this issue.
Silence is not a solution.

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Please note, dear users, that Euler is a modular protocol where everyone is free to create vaults and deposit money in them without being forced to do so, and is in no way responsible for the loss of funds in a vault managed by a third party.

Asking the protocol for compensation for a fault for which it is not responsible is like asking Uniswap for compensation because a pool has been rug pulled; it makes no sense.

The power of DeFi is to let users be in control of their money and put it where they want. It’s up to you to decide how much risk you’re willing to take.

In any case, I’ve talked to some of the biggest holders, and they’ll all vote against any form of compensation. The protocol shouldn’t have to pay for the curators’ mistakes.

3 Likes