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Encyclopedia Ethereum · Entry 124

ERC-4626 vaults: assets, shares and conversion previews

AI-assisted research · separate automated verificationCorrections

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Ethereum
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2 cited records
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About 3 minutes
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In this article

At a glance

Key facts

Key facts for ERC-4626 vaults: assets, shares and conversion previews
FactDetailSource
Two unitsAssets are underlying-token units; shares represent the vault position.[1]
Operationdeposit specifies assets, while mint specifies shares to receive.[1]
LimitsPreview methods and maxWithdraw or maxRedeem answer different questions.[1]
01

Track the share conversion

In a simplified vault with 1,200 assets and 1,000 shares, the accounting ratio is 1.2 assets per share. A deposit of 120 assets would correspond to 100 shares before fees, rounding and any implementation-specific offsets.

The ratio can change as the vault earns or loses assets. A fixed share count does not imply a fixed claim in asset units.

02

Do not use an ideal conversion as an execution quote

convertToShares and convertToAssets describe idealized conversions and exclude some execution conditions. Preview methods model the specified operation with defined fee and rounding requirements.

previewWithdraw must exclude withdrawal limits, while maxWithdraw must account for them. A nonzero conversion does not prove that the owner can withdraw that amount immediately.

03

The interface leaves strategy and risk open

A vault can deploy its assets through lending, liquidity provision or another strategy. Losses, administrative changes and external dependencies still depend on the implementation.

Share rounding can also create economic vulnerabilities, including donation-based inflation attacks in vulnerable designs. Standard interfaces improve interoperability, not an automatic safety rating.

Direct answers

Questions people ask

Are withdraw and redeem identical?

No. withdraw requests a specified amount of underlying assets and calculates shares to burn; redeem specifies shares and calculates assets received, under the vault’s rules.

Inspect the evidence

The answer and key facts have stable claim links. These records retain the scope and qualification when reused.

ERC-4626 standardizes an interface for vault shares with a single underlying ERC-20 asset for accounting, deposits and withdrawals. It defines deposit, mint, withdraw, redeem and conversion methods. It does not prescribe a safe investment strategy, guarantee a return or make preview values equivalent to currently available withdrawal liquidity.

Scope: Ethereum · data through 2026-10-02. Verification: verified · 2026-10-02T18:12:41.505Z.

Link to this claim
Two units: Assets are underlying-token units; shares represent the vault position.

Scope: Ethereum · data through 2026-10-02. Verification: verified · 2026-10-02T18:12:41.505Z.

Link to this claim
Operation: deposit specifies assets, while mint specifies shares to receive.

Scope: Ethereum · data through 2026-10-02. Verification: verified · 2026-10-02T18:12:41.505Z.

Link to this claim
Limits: Preview methods and maxWithdraw or maxRedeem answer different questions.

Scope: Ethereum · data through 2026-10-02. Verification: verified · 2026-10-02T18:12:41.505Z.

Link to this claim
Revision history
  1. — First publication after primary-source research and independent automated verification.

Source register

Sources and references

Retrieval dates and locators are recorded individually.
  1. Tokenized VaultsEthereum Improvement Proposals

    Assets, shares, deposits, withdrawals, limits and preview rounding.

    Locator: Specification; Security Considerations · Version / scope: EIP/ERC-4626; retrieved document hash recorded · Retrieved: 2026-10-02T17:03:42.366ZOpen source
  2. ERC-4626OpenZeppelin

    Vault share conversion, rounding, donations and inflation-attack defenses.

    Locator: Security concern: Inflation attack; Defending with a virtual offset · Version / scope: OpenZeppelin Contracts 5.x · Retrieved: 2026-10-02T17:03:43.088ZOpen source
How this article was made

Research and drafting use AI assistance. A separate automated review checks claims against primary sources; no external expert or named human review is implied. Publication, substantive editing, source retrieval and verification are recorded separately. This version was independently checked by an automated reviewer on 2 October 2026.

Editorial method and corrections

Degrees of Satoshi editorial project. “ERC-4626 vaults: assets, shares and conversion previews.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/erc-4626-tokenized-vaults/