Introduction
Now that Euler has relaunched, it is time to start growing the protocol back to its former glory. With this in mind, we are pleased to introduce rEUL (Reward EUL), a new locked form of EUL designed to reward early adopters of v2 and align their interests with the long-term growth of the platform. Here, we propose to deprecate the existing points programme, which many users found confusing, and instead distribute rEUL to protocol users over the next year using up to 5% of the total EUL supply. The distribution of tangible rewards should help to make things clearer for users, boost growth, and better distribute governance of the new protocol to the community. Both supply and borrow sides of select markets will be eligible for rewards, along with more directed campaigns that allow rewards to be directed at users with specific positions (specific collateral/debt pairs). Unlocked EUL tokens can be used to participate in governance or used to participate in Fee Flow auctions.
How to earn rEUL
Reward EUL converts to 1:1 with EUL over a period of 6 months. The unlock follows a non-linear schedule, where 20% unlocks immediately after rEUL is first transferred to a user’s wallet, and the remaining 80% unlocks linearly over 6 months, reaching full unlock at maturity. Rewarded users are free to redeem EUL at any point during unlock period, but any locked EUL remaining will be forfeited and burned from the EUL total supply.
Example
Suppose Alice deposits $10,000 USDC to Euler and is earning 100 rEUL per month as rewards. After 3 months, she decides to transfer 300 rEUL to her wallet. At this point the clock starts ticking to unlock 300 EUL. She can immediately redeem 60 EUL if she wishes (20% of her expected 300 EUL at maturity). If she does this, however, all remaining 240 EUL will be forfeited and burned from the total supply. If she decides to wait the full 6 months she will be free to redeem a full 300 EUL at maturity. She can also redeem anytime in between to get a proportional share of the unlocked EUL. She can also keep withdrawing rEUL to her wallet at any time she likes. Each transfer starts a separate unlock schedule. Note that rEUL is therefore a non-fungible asset, even though it has an ERC20-like interface.
Which markets are supported?
The proposal is to allocate rEUL to supported markets by a DAO-appointed committee so that rewards can be rapidly adjusted as new markets emerge. In general, any market that has been sufficiently bootstrapped with liquidity and that shows promise for demand and product market fit should be eligible for rewards over the following year.
How much EUL will be issued in rewards?
The proposal is to distribute a maximum of 5% of EUL total supply over 1 year. However, the amount distributed each month to each market will likely be highly variable, depending on a variety of factors and perceptions of the overall success of the programme.
How will the distribution appear on the UI?
The amount allocated to each market will be reflected in the Net supply APY and Net borrow APY of rewarded markets. The underlying distribution of rEUL will be handled via native integrations with Euler’s Reward Streams module, as well as through https://merkl.angle.money/, where the rewards distributed to Euler markets will also appear on their website.
Has rEUL been audited?
Yes. The smart contract was audited by yAudit on October 2nd 2024 and the audit can be viewed here. The audit was performed by two yAudit lead security researchers HHK and Panda.
What will happen to the points programme?
Under this proposal it will be deprecated. Users have complained that the programme was not clear because it offered no tangible benefits to users. A proposal for a new leaderboard for trader P&L may be introduced in the future, where users may be able to win prizes for successful trades. Existing holders will receive a share of 1000 rEUL on the launch of the new rewards programme proportional to the points they hold.