Sunsetting of DAO-Managed Market and Vaults
Summary
This proposal recommends that Euler DAO vote to sunset all directly managed markets and vaults currently operated under DAO governance. Euler Labs believes this step is necessary for the protocol to fully realise its identity as neutral, credibly decentralised infrastructure - and to move away from a governance model that is structurally misaligned with the operational demands of active market management.
Motivation
Euler has evolved. What began as a protocol that operated its own markets has matured into infrastructure upon which others build. That evolution demands a corresponding change in how the DAO deploys its resources and attention.
Several structural tensions have made continued direct market management untenable:
1. Misalignment of identity and operations Euler’s competitive advantage lies in its infrastructure - the underlying protocol, its security model, and its composability. Running markets is an operational activity that sits outside this core competency.
2. Structural conflicts with risk service providers The model of outsourcing risk curation to third-party service providers creates inherent alignment problems. Where a risk provider simultaneously operates competing vaults on other platforms - vaults that directly compete with the very markets they are curating for Euler - a conflict of interest is unavoidable regardless of individual intent. This is a systemic issue, not a criticism of any specific firm.
3. Prioritising Growth and Aligned Partnerships Several DAO-managed markets have seen materially reduced engagement in recent months, and continuing to allocate governance and operational resources to them no longer serves the protocol’s best interests. Winding down or transitioning these markets will allow the DAO to redirect its focus toward higher-impact opportunities - including an increased institutional offering - and to prioritise relationships with partners and curators who are actively driving strategy, accountable to measurable outcomes, and genuinely invested in Euler’s long-term growth.
Specification
1. Identification of Affected Markets and Vaults Euler Labs has published, alongside this proposal, a full inventory of all markets and vaults currently under direct DAO management.
2. Curator Handover Window This is in process. Euler Labs has identified qualified curators, K3 and AlphaGrowth, to take over management of one or more of the affected markets or vaults. Relevant markets and vaults will be handed over to suitable new curators where a credible, aligned candidate is identified. If you do not feel comfortable with the entities taking over the markets, you should exit your positions. After the takeover, K3 and AlphaGrowth will be permitted to grow and manage these markets as they see fit.
3. Wind-Down Process For any markets or vaults not assumed by a curator following the handover window, the following wind-down procedure will apply:
- Borrowing halted: New borrows will be disabled by setting borrow caps to zero.
- User notification: Markets will be deprecated from the UI 7 days after the proposal passes, serving as the initial notice to users. Where applicable, a 30-day LTV ramp-down period will begin at the same time, giving users a window to manage their positions before collateral requirements tighten. For markets proceeding to full closure, a minimum 7-day formal notice period will follow, communicated via all official Euler channels (forum, app UI, socials), to allow all users to withdraw funds in an orderly manner.
- Market closure: Following the notice period, remaining positions will be managed to resolution and markets formally decommissioned.
Deprecation from the UI does not mean users will be unable to access their positions - even after deprecation, depositors and borrowers in affected markets will be able to use the official UI to access their funds at any time. Deprecation from the UI means only that markets will no longer be visible to new users.
4. Governance Going Forward Upon completion of the sunset:
- The DAO will no longer directly manage any lending markets or vaults.
- Future market creation on Euler infrastructure will be the responsibility of independent, accountable curators who bear full operational and reputational responsibility for their markets.
- Euler Labs will focus governance proposals on protocol-level decisions: parameter changes, integrations, treasury management, and infrastructure development.
Status of Individual Markets
State as of April 8th. Note that the market conditions below (total supply, total borrows, open interest) may change before this proposal is executed - in each case, conditions will be evaluated at the time of execution to minimise any potential harm to users.
If you hold positions against any affected collateral in any affected market, we strongly encourage you to close those positions proactively to avoid being forcefully liquidated. The liquidation bonus is always a function of available liquidity and, in some circumstances, it may become costly.
EVK Markets
| Network | Market | Total Supply | Total Borrows | Outcome | Curator |
|---|---|---|---|---|---|
| Ethereum | Euler Prime | $13.31m | $4.89m | Handover - disable sUSDS, sBUILDL, TBILL as collaterals | K3 |
| Ethereum | Euler Yield | $2.51m | $790k | Handover - disable USDC Prime, USDT Prime, sBUILDL, TBILL, PT-srUSDe-2APR2026, PT-jrUSDe-2APR2026, PT-stcUSD-23JUL2026 as collaterals | K3 |
| Ethereum | Frontier Apollo | $1.36m | $519k | Handover - disable USDC Prime, USDT Prime, PT-mAPOLLO-20NOV2025 as collaterals | AlphaGrowth |
| Ethereum | Frontier Falcon | $892k | $353k | Handover - disable USDC Prime, USDT Prime, PT-USDf-29JAN2026, PT-sUSDf-29JAN2026 as collaterals | AlphaGrowth |
| Ethereum | Frontier: Pareto, Puffer, Upshift, Strata, Cap, mBTC, mMEV | <$100k OI each | — | 30-day LTV ramp-down, then deprecated from UI | — |
| Ethereum | Remaining Frontier markets (no open interest) | — | — | Deprecated from UI | — |
| Unichain | Euler Unichain | $4.18m | $1.92m | Handover | AlphaGrowth |
| Monad | Isolated wstETH-WETH-AUSD | $15.1m | $4.77m | Handover | K3 |
| Monad | Isolated wstETH-WETH-USDC | $4.84m | $1.43m | Handover | K3 |
| Monad | Isolated WBTC-AUSD | $674k | $216k | Handover | K3 |
| Monad | Isolated WBTC-USDC | $558k | $75k | Handover | K3 |
| Monad | Isolated sMON-WMON-AUSD | $506k | $202k | Handover | K3 |
| Monad | Isolated XAUT-USDC | $413k | $28k | Handover | K3 |
| Monad | Isolated shMON-WMON-AUSD | $283k | $66k | Handover | K3 |
| Monad | Isolated XAUT-AUSD | $116k | $59k | Handover | K3 |
| Monad | Isolated shMON-WMON-USDC, Isolated sMON-WMON-USDC, Isolated LBTC-USDC, Isolated LBTC-AUSD, all Isolated gMON markets, all Isolated USDT markets | <$30k OI each | — | 30-day LTV ramp-down, then deprecated from UI | — |
| Swell | Euler Swell | $163k | $84k | 30-day LTV ramp-down, then deprecated from UI | — |
| Base | Euler Base | $2.38m | $934k | Handover | AlphaGrowth |
| Base | Frontier YO yoBTC | $415k | $133k | Handover | AlphaGrowth |
| Base | Frontier YO yoUSD | $415k | $176k | Handover | AlphaGrowth |
| Base | Frontier YO yoETH | <$10 OI | — | Deprecated from UI | — |
| Plasma | All Frontier markets | <$10k OI each | — | 30-day LTV ramp-down, then deprecated from UI | — |
| Arbitrum | Euler Theo | $2.45m | $1.13m | Handover | K3 |
| Arbitrum | Euler Arbitrum | $590k | $286k | Handover | K3 |
| Linea | Euler Linea wstETH | $396k | $175k | Handover | AlphaGrowth |
| Linea | Euler Linea weETH | $204k | $94k | Handover | AlphaGrowth |
Earn
| Network | Market | Total Supply | Outcome | Curator |
|---|---|---|---|---|
| Ethereum | Euler Earn USDT | $533k | Handover | K3 |
| Ethereum | Euler Earn USDC | $99k | Stop allocating to Frontier Cap, then handover | K3 |
| Monad | Euler Earn WETH | $7.75m | Handover | K3 |
| Monad | Euler Earn USDC | $2.92m | Handover | K3 |
| Monad | Euler Earn AUSD | $2.36m | Handover | K3 |
| Monad | Euler Earn WMON | $102k | Handover | K3 |
| Base | Euler Earn USDC | $12k | Deprecated from UI | — |
| Arbitrum | Euler Earn USDC | $1.1m | Already deprecated from UI - monitoring pending Resolv resolution | — |
Conclusion
Euler’s strength is its infrastructure. The DAO’s role should be to govern that infrastructure wisely, not to operate markets on top of it. By stepping back from direct market management, the DAO enables a healthier ecosystem: one where curators are accountable, conflicts of interest are minimised and Euler’s governance can focus on what matters most.