Euler’s attackers used the loan to temporarily trick the protocol into falsely assuming it held a low amount of eToken, a collateral token issued by Euler based on whichever token is deposited on the protocol. A separate dToken, or debt token, is also issued by Euler such that an on-chain liquidation is automatically triggered when the amount of dTokens exceeds the eTokens held on the platform.
Source: https://www.coindesk.com/business/2023/03/13/euler-defi-protocol-exploited-for-nearly-185m/?utm_medium=referral&utm_source=rss&utm_campaign=headlines