DeFi faced its very own contagion event this past week after Euler Finance was drained of nearly $200 million via six flash loans and a vulnerability.
It was a major blow to the sector; Euler had been seen as the next great building block after Compound and Aave.
Beyond flinging long-tail assets into the protocol and gambling risk à la Cream Finance, the popular crypto lender created isolated lending pools to help silo collateral damage should degens borrow against the wrong memecoin.
Now, though, the whole ship is sunk.
It’s not just that: along with Euler, roughly 10 other DeFi protocols were affected thanks to the various integrations established along the way. Yield App, Swivel Finance, Angle, and several others all announced their level of exposure to their communities.
Ironically, this ability to clip and connect various liquidity pools and lending platforms throughout the ecosystem was one of the key pillars of DeFi.
Composability, the devs called it. Money legos, yelled the meme gurus.