Euler staking PYTs as new yield sources for BY


Treasury League


A proposal to add the Euler staking Senior tranches as new yield sources for the Best Yield strategy.



As stated by @Teo in the M3-2022’s post and in the M1-2023 roadmap presentation, Leagues are focusing to add new yield sources to the Best Yield strategy

Following this roadmap, in 2022, the DAO agreed to add two new yield sources to the BY strategy, specifically

Funds were successfully routed to the Clearpool uncollateralized lending markets and generated more performing yields.

With IIP-30, the DAO voted to delist these two Senior tranches as BY’s yield sources after the market makers closed their borrowing positions on Clearpool. This action aimed also to reduce the computational burden on the BY strategy.


Today we want to open the discussion on some new integrations: the Euler staking PYTs

Similar to previous integrations, Euler staking ones would benefit doubly the Idle ecosystem

Currently, the Euler staking markets offer the following returns

Token Supply APY Staking APY Base APY
eWETH 1.59% 1.96% 3.55%
eUSDC 1.84% 4.24% 6.08%
eUSDT 2.05% 2.84% 4.89%

We could then expect to have Senior PYTs returns in the 2-3% range.

Euler hit the mainnet in December 2021. Euler’s Perpetual Yield Tranches are live since June 2022. Given the decrease in pure lending rates, the Euler markets on Idle did not get a strong market interest. We see this proposal, also, as a way to invest in a partnership we value.

Euler details

Euler is a non-custodial permissionless lending protocol on Ethereum that helps users to earn interest on their crypto assets or hedge against volatile markets without the need for a trusted third party.

Euler protocol features a number of innovations not seen before in DeFi, including permissionless lending markets, reactive interest rates, protected collateral, MEV-resistant liquidations, multi-collateral stability pools, and much more.

From the security perspective, Euler has been committed to develop various safe mode measures and introduced the Oracle Risk Grading System. This mechanism empowers EulerDAO to enable lending and borrowing on any ERC-20 token thanks to Uniswap v3 TWAP (Time Weighted Average Price). The risk system estimates the oracle manipulation cost, allowing tokens to unlock specific functionalities (e.g. collateral) only above a certain security score.

Euler staking details

With eIP-24 of November 2022, the Euler DAO decided to modify the EUL distribution and incentivize the staking markets of the USDC, USDT, and WETH markets.

For the duration of the three-month trial, 5000 EUL a month (for a total of 15000 EUL) will be distributed to users staking these assets: USDT, USDC and WETH. To stake an asset and receive some of the EUL being distributed, users should stake their eTokens into the staking contract.

Euler’s staking contract is based on Synthetix’s staking contracts. There is no lockup period: hence users can unstake their tokens anytime and claim the accrued EUL up to that moment.

While these eTokens are held in the staking contract, users should be aware that they cannot collateralise loans. You cannot borrow against tokens that are earning these EUL in the staking contract.

Next steps

We are going to leave this thread open for comments regarding additions, and in about 24 hours, if there are no objections, we will proceed with the Temperature Check.


Temperature check voting

The voting phase for the integration as new yield sources of the USDC, USDT and WETH Euler staking (Senior) PYTs into BY starts now :ballot_box:

  • For - Agree with the integration of these Euler staking (Senior) PYTs into the Best Yield
  • Against - Disagree with the integration of these Euler staking (Senior) PYTs into the Best Yield
  • Discuss more - Discuss more the proposal

:arrow_right: Poll for $IDLE holders: HERE
:arrow_right: Poll for $IDLE stakers (stkIDLE holders): HERE

:alarm_clock: Polls will close on 2023-01-22T22:00:00Z

The final $IDLE voting weights will be calculated using the approved calculator.

Looking to delegate your vote on Snapshot? Follow the official Snapshot guide.

Let your vote count! :writing_hand:


Temperature check results

Around 620k IDLE votes were cast in favour of the proposal to list the Euler staking (Senior) PYTs as new yield sources for the USDC, USDT and WETH BY markets.

The related listing actions will be part of the soon-to-be-released improvement proposal, i.e. IIP-31 :hourglass_flowing_sand:


Great to see Euler Staking Senior tranche implemented in Best Yield :fire:

Euler APYs are drastically outperforming Aave and Compound, thus its Senior can let Idle access better returns while maintaining the conservative risk approach.