EulerSwap is a decentralized exchange built on Euler V2. It combines an automated market maker with Euler’s lending infrastructure, so liquidity can sit inside Euler vault positions instead of a standalone AMM pool.

For LPs, token teams, DAOs, and market makers, this creates a different liquidity model: the same capital can support swaps, remain active in Euler lending vaults, and serve as collateral for borrowing, subject to vault parameters, available liquidity, and market conditions.

A Unified System for Swaps, Lending, and Collateral

EulerSwap integrates directly with Euler vaults.

When an LP creates an EulerSwap pool, the assets remain in the LP’s Euler position. That capital can then be used to:

• facilitate swaps
• earn lending interest or rewards where available
• serve as collateral for borrowing

This reduces the need to split liquidity between separate AMM and lending positions. Instead, EulerSwap treats Euler vaults as a shared liquidity layer for swap execution.

Just-in-Time Liquidity

EulerSwap can use Euler borrowing to support just-in-time liquidity.

If a swap requires more of the output asset than the LP currently holds, EulerSwap can borrow the shortfall using the input asset as collateral. This lets an LP support deeper effective liquidity without pre-funding both sides of a pair at the same depth.

In optimal conditions, especially for tightly correlated assets, this design can simulate up to 50x the liquidity depth of a traditional AMM with the same initial capital. The actual result depends on vault parameters, available borrow liquidity, asset volatility, and liquidation risk.

Lending Vaults as Liquidity Hubs

Because EulerSwap liquidity sits inside Euler vault positions, a single supplied asset can support multiple swap markets.

For example, USDC supplied into an Euler vault can remain active in the lending market while also backing EulerSwap pools such as USDC/DAI or USDC/WETH, depending on the LP’s configuration.

This turns Euler lending vaults into liquidity hubs for swap execution, collateral use, and market making.

Hedging Exposure With Native Borrowing

EulerSwap also gives LPs tools to manage exposure.

Because reserves live inside lending vaults, LPs can borrow against their positions. This can support hedged market-making strategies, including cases where an LP supplies one asset, borrows another, and uses the borrowed asset to create or adjust a swap position.

For uncorrelated pairs such as WETH/USDC, this can help LPs manage directional exposure and impermanent loss risk. These strategies can be managed manually or through approved operator contracts, but they introduce borrow-rate, liquidation, liquidity, and execution risk.

Custom AMM Curves

Each EulerSwap pool uses custom AMM parameters selected at deployment.

Curves can be configured for different market types, including:

• symmetric or asymmetric liquidity
• single-sided liquidity
• concentrated liquidity around an equilibrium price
• broader curves for more volatile pairs
• tighter curves for stable or correlated assets

This gives LPs more control over pricing, spreads, and liquidity shape than a standard shared AMM pool.

Single-LP Pool Design

EulerSwap pools are single-LP by default.

Instead of combining many LPs into one shared pool, each EulerSwap instance is created and managed by one LP account. That LP controls the pool configuration, liquidity position, and operating path.

This design is suited to DAOs, token teams, and market makers that want to operate liquidity as an active treasury or market-making position rather than join a shared liquidity pool.

Uniswap v4 Compatibility

EulerSwap is built to work with Uniswap v4’s hook architecture.

This means EulerSwap pools can plug into existing routing and aggregation infrastructure while adding lending-based execution underneath. For traders, a swap can look like a normal DEX trade. Under the hood, EulerSwap may coordinate borrowing, collateral checks, and vault interactions to complete the transaction.

Who EulerSwap Is For

EulerSwap is designed for:

• token issuers launching or deepening liquidity
• DAOs managing protocol-owned liquidity
• market makers running customized LP positions
• LPs that want lending and swap exposure in one structure
• builders integrating swaps, lending, and collateral into one product

Example Use Cases

Correlated Asset Markets

Create a pool between two closely related assets, such as stablecoins or pegged assets.

The LP can supply liquidity, earn swap fees, and keep assets active in Euler vaults where lending demand exists. JIT liquidity can support deeper effective execution when borrow liquidity and market parameters allow it.

Long-Tail Asset Markets

Create a pool between a long-tail asset and a quote asset such as USDC.

The LP can define the curve, fee, and liquidity profile for that market while keeping the quote asset connected to Euler’s lending infrastructure where supported.

Hedged Major-Asset Markets

Create a pool between volatile assets and use Euler borrowing to manage exposure.

For example, an LP could supply USDC, borrow WETH, and create a USDC/WETH pool with a defined hedging approach. This can reduce directional exposure, but it also introduces borrow cost, liquidation, and execution risk.

Launch or Price Discovery Markets

Create an asymmetric or single-sided pool for a new asset.

This can support early liquidity, fixed-price execution, or controlled price discovery without requiring a traditional shared LP pool.

Security

EulerSwap has undergone multiple independent security reviews, including audits by Cyfrin, Cantina, ChainSecurity, and Fuzzland.

EulerSwap also underwent a $500,000 live mainnet capture-the-flag competition in June 2025 using real USDC/USDT liquidity. No funds were compromised during the competition.

Audits and competitions do not remove protocol risk. EulerSwap positions can involve smart contract risk, oracle risk, borrow-rate risk, liquidation risk, liquidity risk, market risk, and execution risk. LPs should evaluate vault parameters and pool configuration before deploying capital.