LlamaRisk does not recommend onboarding EURe to Aave V3 Linea due to critical liquidity concerns. Our assessment found severe limitations in DEX liquidity (only two small pools with 2-figure liquidity), extreme token concentration (86% held by just two addresses), minimal on-chain supply (only 2,278 tokens), and insufficient price history on Linea.
While EURe has strong regulatory credentials as a MiCA-compliant euro stablecoin with audited contracts and a reliable Chainlink price feed, the token’s ecosystem on Linea remains underdeveloped. The centralized nature of minting and redemption, combined with current market conditions, suggests EURe needs more time to develop adequate liquidity before consideration for Aave integration on Linea.
Collateral Risk Assessment
1. Asset Fundamental Characteristics
1.1 Asset
EURe is a euro-denominated stablecoin issued by Monerium. The ERC20 token is overcollateralized at a 102% ratio and redeemable 1:1 for underlying euros. As the first onchain euro stablecoin, Monerium is a regulated Electronic Money Institution (EMI) under the European Electronic Money Directive (2009/110/EC) and is MICA compliant.
Source: Monerium App, X
EMI underlying assets are required to be in bank reserves and debt securities issued and/or guaranteed by (from Table 1 of point 14 of Annex I to the Capital Adequacy Directive):
- National governments
- Central banks
- International organizations
- Multilateral development banks
- EU member states regional/local governments
Securities are limited to short-term, low-risk assets (i.e., AAA grade) with risk capital charges of up to 1.6%. User funds are required to be held in segregated accounts.
Source: State Street EUR Liquidity LVNAV Fund
The majority of EURe’s underlying assets are held in the State Street EUR Liquidity LVNAV Fund, which holds a portfolio of diversified assets with maturities of up to <397 days.
See our previous analysis of Monerium here.
1.2 Architecture
EURe is deployed as an ERC1967Proxy designed to be upgradeable behind a Token implementation contract. Each Monerium proxy contract is a separate instance of the Token contract, with its storage.
Source: Monerium Github
The minting & burning process:
- Due diligence via KYC and allocation of an IBAN associated with an onchain address to a user.
- The registered user sends euros to their IBAN via SEPA.
- An equivalent amount of EURe is minted onchain to the user’s address.
- EURe is burned when redeemed from Monerium, returning an equivalent in euros.
EURe can be minted or burned on demand. An ERC20 allowance determines how much can be minted.
Issuance of EURe is upheld under reserve safeguarding measures. Monerium user funds are currently held by the following institutions: Arion Bank, LHV Bank, State Street Global Advisors.
1.3 Tokenomics
Monerium is the sole issuer of EURe. Total supply varies based on a mint and burn mechanism, with a mint allowance controlled by Admin.
No fees are currently charged for minting and burning. However, Monerium reserves the ability to charge for minting and redemption.
1.3.1 Token Holder Concentration
| Description |
Value |
| Total Holders |
23 |
| Total EURe Supply |
2,278 |
| Top 10 Address Holdings |
99.43% |
| Largest Holder |
EOA 1 (>50%) |
Source: Lineascan, April 19th, 2025
The top 5 accounts are all EOAs, with over 86% of EURe held by 2 accounts. The high concentration outside of liquidity pools or other dApps indicates a low integration of EURe in Linea’s DeFi ecosystem. The top 5 holders are EOA 1 (50.01%), EOA 2 (36.82%), EOA 3 (4.38%), EOA 4 (2.19%), and EOA 5 (2.19%).
2. Market Risk
2.1 Liquidity
Source: EURe/USDC swap, Kyberswap, April 19th, 2025
Linea liquidity is nonexistent, likely due to the recent launch on the chain.
2.1.1 Liquidity Venue Concentration
Source: EURe pools, Geckoterminal, April 19th, 2025
Available liquidity is limited to 2 USDC/EURe NILE pools with 2-figure liquidity.
2.1.2 DEX LP Concentration
Source: Nile Liquidity, April 19th, 2025
As shown in section 2.1.1, meaningful DEX liquidity is unavailable. Currently, NILE pools are not incentivizing LPs to join.
2.2 Volatility
The EURe Linea price history is limited.
2.3 Exchanges
No central exchanges currently support EURe.
2.4 Growth
As shown in section 1.3.1, the token supply is currently low on Linea. When observing EURe supply on other chains, strong recent growth can be seen in Arbitrum and Gnosis markets, while growth is stagnant for Ethereum and Polygon markets.
3. Technological Risk
3.1 Smart Contract Risk
To date, 2 audits by Ackee Blockchain Security have been completed on Monerium contracts:
The most significant change related to risk, as noted in our Monerium risk assessment, is the EURe contract’s ownership change from an externally owned account (EOA) to a Multisig.
3.2 Bug Bounty Program
No bug bounties were found for Monerium contracts.
3.3 Price Feed Risk
A Chainlink EUR/USD price feed is available, a low-risk market feed with a 0.3% deviation threshold, and a 24-hour heartbeat.
3.4 Dependency Risk
In our analysis of EURC, we noted interest rate risk and reserve dependencies. Similarly, EURe shares these risks in addition to the minting and redemption:
Centralized Minting & Redemption
EURe minting relies on receipt of an order via SEPA (Single Euro Payment Area payment system), which creates a reliance on the proper functioning of the system to timely and accurately reflect payments. Additionally, redemptions require holders to have an established relationship with Monerium. The European banking and payments industry, along with EU governments and public authorities, supports the payment system and should be a low-risk factor.
Eurozone Interest Rate Risk
EURe 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 EURe 1:1 peg stability.
Reserve Dependencies
EURe’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 Monerium’s ability to maintain 1:1 redemption guarantees for EURe.
This particular risk is mitigated to a reliable degree by the MiCA compliance.
4. Counterparty Risk
4.1 Governance and Regulatory Risk
Regulatory Status
Monerium ehf., a company incorporated in Iceland under registration number 550512‑1060, is duly licensed as an Electronic Money Institution and remains under the continual prudential oversight of the Financial Supervisory Authority of the Central Bank of Iceland. In parallel, the firm is listed in Iceland’s Virtual Asset Service Providers register.
Source: Central Bank of Iceland, Date: April 22nd, 2025
All operational processes are calibrated to satisfy the Markets in Crypto‑Assets Regulation (MiCA). Consequently, EURe—qualified as an e‑money token—may be offered throughout the European Union by Monerium’s electronic‑money‑institution authorization and the requisite EURe white paper has been lodged and published by Article 51 of MiCA.
Issuance and Redemption
Each EURe token is created at par value immediately after receiving the corresponding funds. A 1:1 reserve, denominated in the same currency, underpins every token: monies are either held in segregated accounts with credit institutions or invested in qualifying high‑quality liquid assets that exhibit only minimal market, credit, duration, and concentration risk. Before crediting a user’s designated address, Monerium may deduct any applicable fees under its schedule of charges.
Token holders enjoy an unconditional right to redeem their e‑money at any time and par. A redemption request may relate to all or part of the balance. The effectiveness of such a request is contingent upon three conditions: first, the holder must possess a matching amount of e‑money at the relevant address; second, the holder must not be in breach of Monerium’s Terms of Service or internal policies; and third, there must be no extant or pending order, investigation, or restriction issued by a regulator, law enforcement agency, or court of competent jurisdiction that would impede redemption.
Monerium endeavors to process redemption instructions promptly; however, the actual transfer of fiat funds is undertaken by the company’s banking counterparties or other payment service providers,. Monerium cannot guarantee completion times once the transaction has entered those third‑party channels. The company may impose ceilings on the amount of e‑money that a user can receive or redeem for legal, security, or risk-management reasons. In certain situations, users may be required to supply additional information or undertake further verification steps concerning their orders or ongoing use of the services. Quantitative limits may also govern the aggregate value or the number of payment transactions executed to or from a user’s IBAN within defined timeframes, such as per business day or other specified period.
Where Monerium determines that a proposed receipt or redemption appears suspicious, may involve fraud or misconduct, or would contravene applicable law or the Terms of Service, it may defer or suspend the transaction. To enhance the robustness of its compliance program in this regard, Monerium has integrated Elliptic’s Lens, Investigator, and Navigator solutions, thereby securing automated anti‑money‑laundering screening, real‑time transaction monitoring, and advanced cross‑chain investigative capabilities.
Safeguarding funds
Funds tendered in consideration for the issuance of e‑money are allocated either to ring‑fenced accounts maintained with Monerium’s banking partners—accounts that are contractually and operationally segregated from the firm’s assets—or to secure and low‑risk instruments held in dedicated custodian accounts with reputable financial institutions. Safeguarding is completed within no later than five business days from the moment the funds become available to Monerium.
The safeguarded monies do not constitute a deposit, loan, or any other form of banking product. Accordingly, Monerium neither pays interest on client balances nor extends guarantees under the Icelandic Depositors and Investors Guarantee Fund. As a result, holders of the EURe token do not benefit from the protection afforded by Act No. 98/1999 on deposit guarantee and investor‑compensation schemes or any analogous insurance arrangements.
Under Article 112 of the Icelandic Bankruptcy Act No. 21/1991, claims of e‑money holders enjoy the highest priority in any bankruptcy estate, ranked ahead of ordinary unsecured creditors and proportionate to each holder’s entitlement. Should Monerium become insolvent—or should any creditor attempt to enforce a judgment against the firm—no third party may lay claim to the assets standing to the credit of the safeguarded accounts, as such funds remain beneficially owned by the e‑money holders and are not subject to liens, charges, or other encumbrances.
While EMIs are not legally obliged to publish attestations of safeguarded assets, Monerium has undertaken to provide regular public attestations in the interest of transparency and market confidence. At present, the preponderance of client balances backing EURe is held in the AAA‑rated State Street EUR Liquidity LVNAV Fund.
4.2 Access Control Risk
EURe utilizes role-based permissions and an ownership management system. Three roles have responsibilities over different functionalities: Owner, Admin, and System.
Here are the controlling wallets:
4/8 Multisig is the sole account used for admin and owner roles.
EOA: sole SystemRole account, allowed to call functions protected by onlySystemAccount.
4.2.1 Contract Modification Options
Roles-related modifications and access control:
Owner
- Can add and remove
admin and system addresses.
- Set the cap for Minting allowances.
- Can upgrade the implementation contract
- Adds or removes Validators
Admin
- Manages the token mintAllowances
- Adds and removes addresses to/from the
BlacklistValidatorUpgradeable contract.
System
- Manages issue and redeem operations by minting and burning through
MintableController.
Mint allowance restricts EURe issuance as an allowance is set, and once depleted, Admin is required to increase the allowance to mint more.
4.2.2 Timelock Duration and Function
No timelocks are present.
4.2.3 Multisig Threshold / Signer identity
The multisig is managed by Monerium’s administrators. According to their most recent update, signers are geographically dispersed and selected from Monerium and its affiliates.
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.
Not provided at this time.
This review was independently prepared by LlamaRisk, a community-led 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.
