# ERC-4626 vaults: assets, shares and conversion previews

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.

Evidence: [Tokenized Vaults](https://eips.ethereum.org/EIPS/eip-4626)

Canonical: https://degreesofsatoshi.com/encyclopedia/erc-4626-tokenized-vaults/
Published: 2026-10-02
Substantively modified: 2026-10-02
Independently verified by an automated reviewer: 2026-10-02T18:12:41.505Z
Data current through: 2026-10-02

AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied.

## Key facts

- **Two units:** Assets are underlying-token units; shares represent the vault position. ([Tokenized Vaults](https://eips.ethereum.org/EIPS/eip-4626))
- **Operation:** deposit specifies assets, while mint specifies shares to receive. ([Tokenized Vaults](https://eips.ethereum.org/EIPS/eip-4626))
- **Limits:** Preview methods and maxWithdraw or maxRedeem answer different questions. ([Tokenized Vaults](https://eips.ethereum.org/EIPS/eip-4626))

## 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.

Evidence: [Tokenized Vaults](https://eips.ethereum.org/EIPS/eip-4626)

## 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.

Evidence: [Tokenized Vaults](https://eips.ethereum.org/EIPS/eip-4626)

## 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.

Evidence: [Tokenized Vaults](https://eips.ethereum.org/EIPS/eip-4626); [ERC-4626](https://docs.openzeppelin.com/contracts/5.x/erc4626)

## Questions

### 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.

Evidence: [Tokenized Vaults](https://eips.ethereum.org/EIPS/eip-4626)

## Claims and scope

### erc-4626-tokenized-vaults-quick-answer

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: {"collection":"ethereum","dataAsOf":"2026-10-02","blockHeight":null}

### erc-4626-tokenized-vaults-fact-two-units

Two units: Assets are underlying-token units; shares represent the vault position.

Scope: {"collection":"ethereum","dataAsOf":"2026-10-02","blockHeight":null}

### erc-4626-tokenized-vaults-fact-operation

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

Scope: {"collection":"ethereum","dataAsOf":"2026-10-02","blockHeight":null}

### erc-4626-tokenized-vaults-fact-limits

Limits: Preview methods and maxWithdraw or maxRedeem answer different questions.

Scope: {"collection":"ethereum","dataAsOf":"2026-10-02","blockHeight":null}

## Sources

- [Tokenized Vaults](https://eips.ethereum.org/EIPS/eip-4626) — Ethereum Improvement Proposals. Assets, shares, deposits, withdrawals, limits and preview rounding. Locator: Specification; Security Considerations. Retrieved: 2026-10-02T17:03:42.366Z.
- [ERC-4626](https://docs.openzeppelin.com/contracts/5.x/erc4626) — OpenZeppelin. Vault share conversion, rounding, donations and inflation-attack defenses. Locator: Security concern: Inflation attack; Defending with a virtual offset. Retrieved: 2026-10-02T17:03:43.088Z.

## Revision history

- 2026-10-02: First publication after primary-source research and independent automated verification.

## Cite this entry

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/