How to Use Euler Finance: v2 Lending Tutorial (2026)
— By Tony Rabbit in Tutorials
Learn how to use Euler Finance v2: connect a wallet, supply assets to earn yield, borrow against collateral, and run looping strategies with sub-accounts.
Euler Finance is a decentralized, noncustodial lending protocol built on EVM chains, and Euler v2 turns it into a modular platform where anyone can deploy isolated lending vaults. Instead of one giant shared pool, v2 connects many independent vaults through shared infrastructure, so risk is contained and yield opportunities multiply. This guide walks through how to use Euler Finance from connecting a wallet to supplying assets, borrowing against collateral, and running leveraged looping strategies, with the trade-offs explained at each step.
Quick answer
- Connect a wallet at app.euler.finance, confirm the network, then use the Lend tab to supply assets and earn supply APY that accrues block by block.
- Use the Borrow tab to borrow against collateral; watch your health score, because liquidation triggers when it reaches 1.
- Euler v2 is modular and permissionless, so vault quality varies; verify any unfamiliar token's contract and chain on DEXTools before you supply or borrow.
What is Euler Finance v2?
Euler is a permissionless, noncustodial lending protocol. You keep control of your funds through your own wallet, and smart contracts handle deposits, interest and collateral. The original Euler popularized features like isolated risk and reactive interest rates, and Euler v2 rebuilds the protocol as a modular lending platform rather than a single monolithic market.
Two building blocks define v2. The Euler Vault Kit (EVK) lets anyone deploy an isolated lending vault for a chosen asset, with its own parameters. The Ethereum Vault Connector (EVC) is the layer that links those vaults together, so a single account can use deposits in one vault as collateral against a borrow from another. The result is a network of composable vaults instead of one shared pool.
Because vaults are permissionless, anyone can create one and act as its curator or governor. That flexibility is the point, but it also means quality varies widely. A vault from a well known risk team behaves very differently from an anonymous one with thin liquidity. By 2026 Euler also lists tokenized real-world assets such as US Treasury bills alongside crypto vaults, which broadens the menu but adds another category to evaluate.
Prepare your wallet and network
Everything starts with a self-custody wallet. Euler supports MetaMask, Rabby, Coinbase Wallet, and any wallet via WalletConnect. Before you connect, fund the wallet with the asset you want to supply plus a little of the chain's native token for gas, and double check you are on a supported network. The app runs on Ethereum mainnet and other supported chains, so the available vaults change depending on which network you select.
Before you connect
Connecting is simple. The app shows a Connect Wallet button, typically in the top corner. Select your wallet provider, approve the connection in the wallet pop-up, and the interface then displays your address and balances. No deposit or signature beyond the connection is needed just to browse the vaults.
How to lend and earn yield
The Lend tab is where you supply assets to earn yield. It typically lists available vaults with columns for the asset, the supply APY, total supply, exposure and utilization. Utilization shows how much of a vault's deposits are currently borrowed, which is what drives the rate: higher utilization usually means a higher supply APY but tighter available liquidity for withdrawals.
Steps to supply an asset
- Open the Lend tab and review the vault list. Sort by asset or supply APY and check exposure and utilization.
- Select a vault and read its details, including the curator and the assets it accepts as collateral.
- Enter the amount to supply. The first time you use an asset you will approve the token, then confirm the deposit transaction.
- Your balance now earns supply APY that accrues block by block. The position appears in your account view.
- Withdraw any time liquidity is available by entering an amount and confirming the withdrawal transaction.
Two points matter for lenders. First, interest is variable, so the supply APY you see is a snapshot that moves with utilization, not a fixed rate. Second, deposits held in your main account can act as collateral, which is convenient if you later want to borrow but also means those funds are exposed to liquidation if you take on debt. If you only want passive yield with no borrowing, you can simply supply and leave the position untouched.
How to borrow, LTV and health
The Borrow tab lists borrowable pairs rather than single assets. Each row typically shows the collateral asset, the debt asset, the supply APY, the borrow APY, the max ROE, the max multiplier, the Borrow LTV and the Liquidation LTV (LLTV), plus market liquidity. The two LTV figures are the most important numbers on the screen.
Reading the key borrow metrics
Steps to open a borrow
- Open the Borrow tab and choose a pair whose collateral and debt assets match your plan.
- Deposit the collateral asset, then enter how much of the debt asset to borrow, staying well under the Borrow LTV.
- Check the projected health score before confirming. A larger buffer above 1 means more room before liquidation.
- Approve and confirm the transaction. The borrowed asset arrives in the position's sub-account.
- Manage the position over time: repay debt or add collateral to lift the health score, and monitor the variable borrow APY.
Borrowing on a permissionless platform demands extra care about which vault you trust. Before supplying to or borrowing in an unfamiliar vault, it is worth confirming the underlying token's contract address and chain on DEXTools so you know exactly which asset you are exposed to, especially when a vault accepts a long-tail collateral.
Strategies, looping and sub-accounts
The Strategies tab offers pre-configured leverage so you do not have to build a loop manually. Looping means you supply a collateral asset, borrow against it, redeposit the borrowed amount, and repeat to amplify exposure. A common version uses a liquid staking token such as stETH as collateral, borrows a stablecoin, swaps and redeposits, stacking the staking yield with the lending spread. On Euler these loops are executed atomically, so the whole sequence settles in a single transaction rather than many fragile manual steps.
Sub-accounts are central to how Euler isolates risk. Each new position opens in its own sub-account, labelled account 1, 2, 3 and so on. A sub-account address differs from your main address only in the final byte, and each one holds a single borrow or multiply position. Because positions live in separate sub-accounts, trouble in one leveraged loop does not drag down an unrelated position elsewhere, which makes it far easier to manage several strategies at once.
Leverage cuts both ways. The same loop that multiplies a modest spread into an attractive yield also multiplies losses if the collateral falls relative to the debt, and it pushes the health score toward 1 faster. Treat the max multiplier as a ceiling, not a target, and keep a comfortable buffer.
Lend vs Borrow at a glance
Common mistakes to avoid
Most painful outcomes come from a handful of avoidable errors. Borrowing right up to the Borrow LTV leaves almost no buffer, so a small price move can push the health score to 1 and trigger liquidation. Ignoring the variable borrow APY is another trap: a rate that looked cheap can climb as utilization rises, quietly eroding a strategy that depended on a tight spread.
Trusting a vault blindly is the most Euler-specific mistake. Because anyone can deploy a vault and set its parameters, you inherit the curator's risk choices, the oracle it relies on, and the quality of the collateral it accepts. A vault with thin liquidity may also be hard to exit when you most want to. Finally, do not confuse passive lending with looping; supplying for yield is relatively simple, while a leveraged loop carries the full weight of liquidation and oracle risk.
Troubleshooting
If the app does not show your balances, recheck that your wallet is connected and on the correct network; the wrong chain is the most common reason vaults or funds appear to be missing. If a supply or borrow transaction fails, it is often a missing token approval, insufficient gas, or a slippage limit on a looped strategy; retrying after a fresh approval usually clears it.
If a withdrawal will not go through in full, check the vault's available liquidity. When utilization is very high, some deposits are lent out and you may only be able to withdraw part of your balance until borrowers repay or other lenders supply. If a borrow is rejected, your health score may already be too close to the limit, in which case adding collateral or reducing the borrow size restores the buffer.