Euler Finance is looking to stage a comeback. On Sept. 4, Euler launched its modular v2 iteration, allowing developers to create money market vaults supporting “almost any kind of digital asset” as collateral. Developers can build both permissioned and permissionless vaults catering to either retail or institutional users on Euler v2. Vaults can also be chained together, allowing developers to build on top of existing products created using the protocol. “Euler v2 is modular by design, allowing builders to create highly customizable borrowing and lending vaults,” Euler said. “Euler v2 is reimagined as a meta-lending protocol designed to support limitless use-cases for on-chain credit, opening doors for seasoned DeFi users and institutional players alike.” Euler v2’s launch followed more than one year of development and code auditing. In August, Euler said 12 different security firms completed code 29 audits at a cost of roughly $4 million to the Euler DAO ahead of v2’s release. Euler also offered $1.25 million in bounties to security researchers who were able to find any code bugs following the formal auditing process. More than 600 researchers participated in the initiative, with Euler describing the program as “the largest code audit competition ever” at the time. However, no medium or high-risk issues were found, with researchers receiving the $200,000 allocated for identifying low-risk issues. $197M exploit Euler’s emphasis on security comes as little surprise, with Euler v1 lending protocol suffering a devastating hack in March 2023. Hackers took advantage of bugs in Euler’s smart contracts to make off with $197 million worth of tokens, on March 13 including $136M of stETH, $34M in USDC, $18.5M in Wrapped BTC, and $8.8M in DAI. The incident ranks as the tenth-largest on-chain exploit, according to Rekt. However, Euler was able to claw back 90% of the stolen funds following negotiations with the hacker over four weeks. The two parties entered into negotiations after Euler offered a $1M bounty for information regarding the hacker’s identity and threatened to engage law enforcement. Euler entered "hibernation" mode following the exploit and ceased accepting deposits following the exploit. Euler v2 Euler v2 comprises three core modules: Euler Vault Kit (EVK), the Ethereum Vault Connector (EVC), and Euler Price Oracle (EPO). The EVK comprises a development kit for deploying customizable vaults using the ERC-4626 tokenized vault standard, which provides an API for tokenizing yield-bearing vaults and represents shares as a single ERC-20 token. Euler said vaults can support fungible tokens, tokenized real-world assets, or NFTs. The EVC allows vaults to be chained together, allowing developers to use assets in existing vaults as collateral. Euler said EVC unlocks an innovative bootstrapping mechanism for developers. “Deposits in old vaults gain new utility when they are recognized as collateral by newer vaults,” Euler said. “Meanwhile, new vaults gain a ready-made user base for borrowing when they accept deposits from already liquid and widely used existing vaults as collateral.” The EPO provides pricing data to vaults. Euler noted that each module was audited independently and in conjunction with one another. Euler noted that vault creators specify risk parameters for vaults and choose whether to retain centralized or open governance mechanisms. The price of EUL is down 4.9% over the past 24 hours, according to The Defiant’s crypto price feeds. Read More: Euler Finance Seeks Redemption Arc With V2 Deployment