Euler Finance

## Summary

As could be recently seen, the current permissionless EUL distribution system is prone to manipulation. Specific steps have to be taken to mitigate further manipulation attempts so that EUL tokens are distributed to the genuine users of the protocol. The proposal includes the requirement that only tokens present on the Coingecko-derived Euler token list at the time of the voting period start can take part in the EUL distribution system. The solution proposed is non-exhaustive, however simple to implement and if the proposal passes, the rules will be changed at the beginning of the next voting period.

Motivation

With EUL token launch, the gauges voting system has been opened to EUL holders so that anyone can stake their EUL and redirect distribution to their favourite markets. It was quickly proved that the proposed voting system has a drawback that makes it possible to redirect EUL distribution to fake tokens, created purposefully for that occasion. I still believe that the voting system makes the distribution more democratic, more likely to decentralize, and more likely to create value for lenders (through increasing interest rates) if the market for EUL distribution is free and fair.

The requirement that only tokens present on the Coingecko-derived Euler token list at the time of the voting period start can participate in the EUL distribution will make the system more robust while being easy to implement so that the rules new can be enforced at the beginning of the next voting period. The Coingecko-derived Euler token list is an open-sourced token list that contains tokens listed on Coingecko that are present on Ethereum and have liquidity against WETH on Uniswap v3. As of now, the list includes 1348 tokens of which 67 are currently listed on Euler. The list is updated daily.

https://github.com/euler-xyz/euler-tokenlist/blob/master/euler-tokenlist.json

I acknowledge the other proposals created by the community members. Ideas of voting participants incentivization, token supply threshold or certain oracle rank still need more discussion and/or are harder to be implemented at the moment. Hence, I propose to first vote and hopefully implement the token list requirement that should mitigate the manipulation risk the EUL distribution system is facing now, while the other proposals can be discussed and voted upon parallelly.

Specification

Only tokens present on the Coingecko-derived Euler token list at the time of the voting period start can take part in the EUL distribution.