LlamaRisk supports the onboarding of EURC to Base Aave V3. EURC is a MiCA-compliant stablecoin issued by Circle, following the same full-reserve model as USDC. Its reserves are held in regulated financial institutions in the EEA and audited by Deloitte. Currently, EURC’s minting, burning, and cross-chain distribution are managed via Circle Mint, as Circle’s Cross-Chain Transfer Protocol (CCTP) support for EURC is not yet available but is planned for the future. CCTP allows permissionless cross-chain transfers via native burning and minting.
On Base, DEX liquidity for EURC is evenly distributed, reducing risks from liquidity withdrawals. However, concerns remain, including the absence of publicly available smart contract audits, such as this report from Halborn. Additional issues include reliance on centralized admin and owner EOAs (could be an MPC wallet) instead of multisigs. The lack of a timelock on the contract is another concern. These points could not be fully reviewed at this stage, and we will expand on them once more clarity is received from Circle.
Collateral Risk Assessment
1. Asset Fundamental Characteristics
1.1 Asset
Key Statistics on Base (as of January 17th, 2025):
- Circulating Supply: 36.96M EURC
- Market Cap: $38.07M
- Current Yield: N/A
- Launch Date: August 1st, 2024
Contract: 0x60a3E35Cc302bFA44Cb288Bc5a4F316Fdb1adb42
EURC is an ERC-20, 100% euro-backed stablecoin compliant with MiCA. It is redeemable 1:1 for Euro supported by Circle Mint, an institutional 1:1 on/off-ramp service from Circle. The euro reserves backing EURC are held at regulated financial institutions in the European Economic Area (EEA) by the EU MiCA regulation, with monthly attestation reports prepared according to attestation standards set out by the American Institute of Certified Public Accountants (AICPA). Deloitte & Touche LLP has been Circle’s independent auditor since fiscal 2022.
Aside from Base, EURC is available on multiple other chains like Ethereum, Solana, Avalanche, and Stellar, with a total of €90.3M EURC in circulation as of January 16th, 2025.
1.2 Architecture
Circle issues EURC under the same full-reserve model as USDC. Euro-denominated banking accounts back EURC 100% so that it is always redeemable 1:1 for euros. Circle is the sole issuer of EURC. Circle’s Cross-Chain Transfer Protocol (CCTP) functionality isn’t currently available for EURC, meaning EURC transfers between blockchains via native burning and minting are not possible. Hence, EURC transfer across blockchains depends on Circle Mint and its APIs.
Circle Mint
Businesses and institutional distributors, such as exchanges, wallet providers, banks, and other large financial institutions, can mint EURC through Circle Mint, a service tailored for high-volume minting and distribution. Accessing EURC via Circle Mint requires users to create an account and undergo a rigorous application process, including ID verification, KYC checks, and sanctions screening. This service is not offered to retail consumers or individuals minting EURC for personal use. Mint and redemption of EURC are carried via wire transfers, SEPA, and other banking networks in over 185 countries.
EURC Minting/Burning Process via Circle Mint. Source: LlamaRisk
Circle Mint does not charge EURC tokenization or redemption fees via bank wire. However, fees may apply for outbound EURC transfers to external addresses based on network transaction costs. Additionally, Circle retains any interest earned on EURC held in custody but does not impose direct custody fees. Currency conversion fees may apply if wires are denominated in currencies other than USD.
EURC tokenization/redemption has some per-customer limits:
- Tokenization: Unlimited
- Redemption: €500,000 daily
However, these limits can be adjusted. Net daily redemptions exceeding €2M incur a fee based on the user’s redemption tiers, i.e., Standard or Basic:
EURC Redemption Structure. Source: Circle, January 17th, 2025.
1.3 Tokenomics
The total supply of EURC is not fixed, and only Circle is authorized to issue new tokens. 18,972 unique addresses hold EURC on Base.
1.3.1 Token Holder Concentration
EURC Top 100 Token Holders. Source: BaseScan, January 17th, 2025.
The top 5 holders of EURC are:
0x7b2c99188D8EC7B82d6b3b3b1C1002095F1b8498: 10.28% of the total supply and is held in Alien Base’s UniswapV3Pool.0xBBBBBbbBBb9cC5e90e3b3Af64bdAF62C37EEFFCb: 9.25% of the total supply and is held in Morpho.0x40EbC1Ac8d4Fedd2E144b75fe9C0420BE82750c6: 2.7% of the total supply and is held in a Coinbase: Hot Wallet.0xd45dfDe8F6C0058AEE13F570e0624cAdbcFf47D8: 2.65% of the total supply and is held by an EOA.0x62B3a71D1a12Fe7916288ABe549a905D0C188917: 2.65% of the total supply and is held by an EOA.
2. Market Risk
2.1 Liquidity
EURC/WETH swap with <7.5% price impact. Source: DeFiLlama, January 17th, 2025.
Users can swap EURC worth up to $2.2 million (2.1M EURC) for WETH in a transaction with less than 7.5% slippage.
2.1.1 Liquidity Venue Concentration
EURC Liquidity Pools on Base by Trading Volume. Source: GeckoTerminal, January 17th, 2025.
The total EURC liquidity across DEXs on the Base network is approximately $8 million. The primary liquidity hubs for EURC include the EURC/USDC pool on Alien Base, followed by the CL50-EURC/USDC and vAMM-WETH/EURC pools on Aerodrome.
2.1.2 DEX LP Concentration
The liquidity for EURC on DEXs across Base is evenly distributed with no significant concentration among a few users. The breakdown for the top 5 EURC pools on Base by TVL (as of January 3rd, 2025):
- Alien Base V3 EURC/USDC ($5.6M TVL): Despite being the largest EURC pool on Base by liquidity, the pool is heavily skewed, with 99.9% of the assets in EURC, leading to minimal trading activity. The entire liquidity is held within the Alien Base Staking contract (Range1, Range2) and is evenly distributed among 34 users.
- Aerodrome vAMM-WETH/EURC ($3.9M TVL): 99.9% of the liquidity is held within the Gauge Address, aggregating funds from multiple users. The top contributors, EOA1, Beefy, and EOA2, hold approximately equal shares, collectively accounting for 60% of the total liquidity.
- Aerodrome CL50-EURC/USDC ($3M TVL): 99.84% of the liquidity is held within the Gauge Address. The largest contributor is an EOA, with a share of 46.81%.
- Aerodrome CL100-WETH/EURC ($1.4M TVL): 96.15% of the liquidity is held within the Gauge Address. The largest contributor is an EOA, accounting for 32.21% of the total liquidity, followed closely by Arcadia Finance, which holds a 25.37% share.
- Aerodrome CL1-EURC/USDC ($0.64M TVL): 87.13% of the liquidity is held within the Gauge Address. Among these, the largest contributor is a 1/1 Safe Multisig with a 37.5% share. This pool has the highest trading volume.
2.2 Volatility
EURC to EUR chart. Source: CoinGecko, January 17th, 2025.
EURC’s price has consistently maintained a tight correlation with the Euro, rarely deviating by more than 1%. However, over the past few months, it experienced temporary deviations from its peg during periods of heightened market volatility but has reverted to its peg quickly.
2.3 Exchanges
EURC Markets on Centralized Exchanges. Source: CoinMarketCap, January 17th, 2025.
EURC is traded across several CEXs, though its trading activity and liquidity are predominantly concentrated on a few platforms—Coinbase accounts for over 95% of the trading volume, followed by BitMart and Bitvavo.
2.4 Growth
EURC Circulating Supply on Base. Source: Dune, January 17th, 2025.
The circulating supply of EURC on Base demonstrated significant growth after launch in August 2024, reaching its peak in November 2024 with an onchain market cap of 50.3M EURC. However, the supply has since experienced a gradual decline, stabilizing around $34 million as of January 2025.
Circle plans to introduce CCTP support for EURC in the future, similar to USDC, enabling secure and native transfers of EURC across blockchain networks.
3. Technological Risk
3.1 Smart Contract Risk
Circle’s FiatToken contracts follow OpenZeppelin’s Proxy Upgrade Pattern. The EURC architecture includes two primary contracts:
- FiatTokenV2_2, which implements the core logic for FiatToken functionality.
- FiatTokenProxy, serves as a proxy to route function calls to the implementation contract.
In November 2023, Circle introduced a v2.2 upgrade to the USDC and EURC contracts to reduce gas costs and enhance transaction security on EVM-compatible chains. The changeset underwent an independent audit by Halborn, a third-party blockchain security firm.
3.2 Bug Bounty Program
Circle has a Bug Bounty Program live on HackerOne since May 2024, where the top bounty range is $10,000 for a critical threat, which is relatively low considering the TVL of USDC and EURC. The contracts in the scope can be found here, although the report is not publicly available.
3.3 Price Feed Risk
Chainlink powered EURC/USD feed available. The feed is categorized as Medium Market Risk by Chainlink with a deviation threshold set to 0.3% and a heartbeat of 24 hrs.
3.4 Dependency Risk
Circle Mint for EURC Distribution
The minting and distribution of EURC rely solely on Circle Mint, as the CCTP, which enables native transfers of Circle-issued assets across blockchains, is currently unavailable for EURC. This limitation means EURC transfers across chains depend entirely on Circle Mint’s infrastructure and APIs. Any disruption to these systems or the associated banking networks could impede the minting, redemption, or cross-chain movement of EURC, posing operational and scalability risks.
Eurozone Interest Rate Risk
EURC reserves are primarily denominated in Eurozone assets, exposing them to fluctuations in interest rates set by the European Central Bank. A sudden rise in interest rates could reduce the value of fixed-income instruments in the reserves, potentially affecting EURC’s 1:1 peg stability and eroding user confidence.
Reserve Dependencies
EURC’s euro reserves are held at regulated financial institutions within the European Economic Area (EEA), ensuring compliance with EU MiCA regulations. However, this creates a technical dependency on these institutions to manage and safeguard the reserves. Any operational disruptions, regulatory actions, or financial instability affecting these institutions could impact Circle’s ability to maintain 1:1 redemption guarantees for EURC.
4. Counterparty Risk
4.1 Governance and Regulatory Risk
Initially issued by Circle LLC in June 2022, EURC transitioned its issuance to Circle SAS on July 1st, 2024. Circle SAS, a registered Digital Assets Services Provider in France (registration no. E2024-111), operates under French law and provides digital asset custody and trading services involving digital assets.
As an electronic money token (EMT), subject to MiCA, EURC is offered to the public within the European Economic Area (EEA) in compliance with MiCA Regulation and French laws. Notably, the French Deposit Guarantee Scheme (FDGS) does not apply to electronic money held in Circle Mint Accounts, as explicitly stated in EURC’s Terms of Use. EURC Whitepaper was notified to the ARFC, the French competent authority, and duly announced to the public.
Circle SAS retains the right to hold EURC reserves in interest-bearing accounts or other yield-generating instruments. EURC holders explicitly acknowledge that any returns from such reserves accrue solely to Circle SAS. Holders do not receive interest or financial returns from their EURC holdings. The asset functions exclusively as a claim on Circle SAS, granting holders the right to redeem EURC for an equivalent amount of USD, which aligns with Circle’s Redemption Policy.
EURC holders maintain a legal claim against Circle SAS and can request redemption at par value at any time. However, retail redemptions are conditional upon eligibility criteria to ensure regulatory compliance, including adherence to AML/CTF measures. Holders must meet the redemption requirements, such as providing an IBAN from an EEA bank account for fund transfers and completion of identity checks.
Circle SAS reserves the right to restrict or block certain EURC addresses if it determines, at its sole discretion, that these addresses are associated with illegal activity or violations of the Terms of Use. Users must expressly acknowledge and agree not to engage in Restricted Activities or attempt Prohibited Transactions while using Circle’s services. Should Circle become aware that a user is participating in or attempting such restricted actions, this will violate Circle’s Terms of Use. In response, Circle reserves the right to take enforcement actions, including suspending or terminating the user’s account.
Users are prohibited from utilizing Circle’s services if they reside in certain jurisdictions. The list of supported countries is maintained and periodically updated by Circle. Users residing in countries not included on this list or in jurisdictions subject to international sanctions are restricted from accessing Circle’s services.
EURC redemptions are prohibited for holders who:
1. Fail to provide sufficient or consistent information required for identification and verification under applicable laws.
2. Are subject to sanctions, including those listed in EU or French sanctions-related lists.
3. Reside, operate, or are organized in a country or region on the Circle France Prohibited Countries List.
4. Engage in transactions flagged as suspicious under applicable laws.
5. Are owned or controlled by individuals or entities that fall under the above categories.
4.2 Access Control Risk
The stablecoin-evm is the source repository for smart contracts used by Circle’s stablecoins on EVM-compatible blockchains.
4.2.1 Contract Modification Options
EURC is powered by two contracts:
- EURC ERC-20 deployed behind FiatTokenProxy, which serves as a proxy to route function calls to the implementation contract and is owned by an EOA.
- Implementation Contract deployed behind FiatTokenV2_2, which implements the core logic for FiatToken functionality and is owned by the burn address.
The design of Circle’s FiatToken contracts incorporates functionality for minting and burning tokens by authorized entities, pausing all contract activity, freezing specific addresses, and upgrading the contract to address bugs or introduce new features.
The roles and functionalities of the EURC contract are as follows:
| Role |
Functionality |
owner |
Re-assign any role except for admin. |
admin |
Manage proxy-level functionalities. |
blacklister |
Prevent transfers to/from an address and prevents it from minting/burning. |
masterMinter |
Add/remove minters and increase their minting allowance. |
minters |
Create/destroy tokens. |
pauser |
Pause the contracts, preventing all transfers, minting, and burning. |
rescuer |
Transfer any ERC-20 token locked in the contract. |
Critical Contract Functions
- Mint/Burn: Authorized entities, referred to as
minters, are permitted to mint and burn tokens. These entities are affiliated with Circle and undergo a thorough vetting process before being granted the ability to mint new tokens. masterMinter adds new minters via the configureMinter method, each with a specified minterAllowance configured by Circle. Tokens are minted and burned via the mint and burn methods.
- Pause: When the contract is paused, all transfers, minting, burning, and adding new minters are disabled. However, operations such as modifying the blacklist, removing minters, changing roles, and performing contract upgrades remain functional. The ability to pause or unpause the contract is restricted to the
pauser role, which Circle controls.
- Blacklist: A blacklisted address cannot transfer assets in any way, and Circle can blacklist an address through the
blacklister role calling the blacklist method.
4.2.2 Timelock Duration and Function
There is no timelock configured on the EURC ERC-20 contract. The EURC contracts follow OpenZeppelin’s Proxy Upgrade Pattern.
4.2.3 Multisig Threshold / Signer identity
The EURC ERC-20 contract is owned by an EOA, and its admin is a different EOA. The EOAs can be MPC wallets; clarity is needed here.
Note: This assessment follows the LLR-Aave Framework, a comprehensive methodology for asset onboarding and parameterization in Aave V3. This framework is continuously updated and available here.
This review was independently prepared by LlamaRisk, a community-led non-profit decentralized organization funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.
