Can Euler Finance Carve Out a Moat?

Aave and Compound have paved the path for the basic money market design space in DeFi. Both protocols have dominated the landscape and weathered numerous threats from newer, more agile competitors. In the process, they’ve had to compete with protocols that employed lucrative liquidity mining incentives to attract users. Yet, they have undoubtedly reigned as the top money market protocols in all of DeFi.

While Aave has been continually shipping new features, Compound has made improvements and added token markets at a slower rate. It also suffered a well-publicized hiccup last year. Along with the overall crypto market, both protocols have been in decline. Aave’s TVL is down 70% from all-time-highs and Compound’s is down 80% from its peak.