Euler is a lending protocol built from vaults. Each vault holds one asset, lends it to borrowers, and is its own ERC-4626 share token, so a deposit is a share whose value only rises as borrowers pay interest. The vaults are linked by a connector that lets one vault accept another's shares as collateral, which makes every market a deliberate pairing rather than one shared pool.

That design puts the terms in plain view. A vault publishes which collateral vaults it accepts and at what loan-to-value, the oracle and unit of account it values them in, its supply and borrow caps, its interest rate model, and the fee it keeps. An account names its collateral and the one vault it borrows from, and that vault alone decides whether the account is healthy.

The flexibility is also the work. Rates move with utilization in every vault separately. A curator ramps a liquidation LTV down while the position sits. The borrow that was cheap at breakfast is not the borrow that is cheap at dinner, and the account that was healthy against one controller has to be re-reasoned before it moves to another.

Every number a vault keeps is a step in a plug: the share rate and total assets, the cash it can still lend, the interest it charges, an account's debt, and the collateral value its controller sees against that debt. Depositing, withdrawing, enabling collateral and a controller, borrowing and repaying run when a condition is met rather than when someone happens to be watching.

Debt repaid the moment the rate crosses a line. Collateral topped up before the controller's margin runs out, not after. A borrow moved to a cheaper vault the block the spread opens, controller released and re-enabled in order.

The accounts that do best in modular lending are the ones whose rules run themselves, and Euler's vaults expose every input those rules need.