{
  "$schema": "https://degreesofsatoshi.com/encyclopedia/schemas/article-v1.json",
  "schemaVersion": "1.0.0",
  "id": "yield-vaults",
  "canonical": "https://degreesofsatoshi.com/encyclopedia/yield-vaults/",
  "collection": "defi",
  "title": "Yield vaults: shares, strategies and the meaning of redemption",
  "description": "Read a yield vault as an asset-to-share accounting system with a strategy, including preview limits, fees, rounding and inherited dependencies.",
  "aliases": [
    "tokenized vault"
  ],
  "dates": {
    "published": "2026-10-02",
    "modified": "2026-10-02",
    "verified": "2026-10-02T15:08:18.373Z",
    "dataAsOf": null
  },
  "authorship": {
    "publisher": "Degrees of Satoshi editorial project",
    "process": "AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied."
  },
  "quickAnswer": {
    "text": "A yield vault pools deposited assets into a strategy and records users’ claims as shares. ERC-4626 standardizes a common asset-and-share interface, not the strategy’s safety or return. A share’s conversion value, realizable withdrawal and market price can differ, particularly when limits, fees or losses apply.",
    "claimId": "yield-vaults-quick-answer",
    "sourceIds": [
      "vault",
      "vaultsecurity"
    ]
  },
  "keyFacts": [
    {
      "label": "Interface",
      "value": "ERC-4626 defines assets, shares, deposits and withdrawals.",
      "sourceIds": [
        "vault"
      ],
      "id": "interface",
      "claimId": "yield-vaults-fact-interface"
    },
    {
      "label": "Limits",
      "value": "Maximum operations and previews have distinct semantics.",
      "sourceIds": [
        "vault"
      ],
      "id": "limits",
      "claimId": "yield-vaults-fact-limits"
    },
    {
      "label": "Rounding",
      "value": "Share conversions and donation effects need careful implementation.",
      "sourceIds": [
        "vaultsecurity"
      ],
      "id": "rounding",
      "claimId": "yield-vaults-fact-rounding"
    }
  ],
  "prerequisites": [
    "liquidity-provider-positions",
    "defi-lending-pools"
  ],
  "sections": [
    {
      "id": "accounting",
      "heading": "Shares divide a changing pool of assets",
      "paragraphs": [
        "Consider a simplified vault with 1,200 underlying units and 1,000 shares. Before fees and rounding, one share corresponds to 1.2 underlying units. Depositing 120 units at that ratio would create 100 shares, leaving 1,320 units backing 1,100 shares.",
        "If the strategy later loses assets, the share claim can shrink. The existence of a standard interface does not specify what the strategy owns, which counterparties it uses or what authority can alter it."
      ],
      "sourceIds": [
        "vault"
      ]
    },
    {
      "id": "preview",
      "heading": "A conversion estimate is not a withdrawal guarantee",
      "paragraphs": [
        "ERC-4626 separates informational conversions from previews and maximum operation limits. For example, a conversion can express an idealized share-to-asset relationship while an operation preview accounts for the relevant transaction semantics and fees.",
        "The amount redeemable now can also be limited. A displayed accounting value should not silently be treated as immediately withdrawable cash. Integrations need the actual method’s defined behavior rather than whichever number produces the most attractive display."
      ],
      "sourceIds": [
        "vault"
      ]
    },
    {
      "id": "rounding",
      "heading": "Small-unit arithmetic matters at the edges",
      "paragraphs": [
        "Deposits and withdrawals round according to their operation’s rules. When a deposit would receive very few share units, rounding can become economically significant. Direct donations can also change the ratio between assets and outstanding shares in some implementations.",
        "OpenZeppelin documents the resulting inflation-attack concern and a mitigation design. That documentation does not certify every vault claiming ERC-4626 compatibility. An assessment must include the deployed implementation, strategy, limits, fees and underlying dependencies."
      ],
      "sourceIds": [
        "vaultsecurity",
        "vault"
      ]
    }
  ],
  "faq": [
    {
      "question": "Does ERC-4626 compliance mean the yield is guaranteed?",
      "answer": "No. It standardizes an interface for tokenized vaults. The strategy can lose assets, fees can apply and withdrawals can be limited. Those properties require examination beyond the interface.",
      "sourceIds": [
        "vault"
      ]
    }
  ],
  "claims": [
    {
      "id": "yield-vaults-quick-answer",
      "articleSlug": "yield-vaults",
      "statement": "A yield vault pools deposited assets into a strategy and records users’ claims as shares. ERC-4626 standardizes a common asset-and-share interface, not the strategy’s safety or return. A share’s conversion value, realizable withdrawal and market price can differ, particularly when limits, fees or losses apply.",
      "sourceIds": [
        "source-0500eb916f66cd39",
        "source-e18b8696025f65d0"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-0500eb916f66cd39",
          "locator": "Specification; Security Considerations"
        },
        {
          "sourceId": "source-e18b8696025f65d0",
          "locator": "Security concern: Inflation attack; Custom behavior"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": null,
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T15:08:18.373Z",
        "reviewer": "automated independent verification",
        "notes": [
          "Read ERC-4626 convert/preview/max operation semantics and OpenZeppelin donation/inflation/rounding discussion. Previews do not override withdrawal limits and interface conformance does not guarantee strategy safety.",
          "Recomputed1,200assets/1,000shares=1.2,120-asset deposit produces100 shares under the stated simplified assumptions, resulting1,320/1,100=1.2."
        ]
      }
    },
    {
      "id": "yield-vaults-fact-interface",
      "articleSlug": "yield-vaults",
      "statement": "Interface: ERC-4626 defines assets, shares, deposits and withdrawals.",
      "sourceIds": [
        "source-0500eb916f66cd39"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-0500eb916f66cd39",
          "locator": "Specification; Security Considerations"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": null,
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T15:08:18.373Z",
        "reviewer": "automated independent verification",
        "notes": [
          "Read ERC-4626 convert/preview/max operation semantics and OpenZeppelin donation/inflation/rounding discussion. Previews do not override withdrawal limits and interface conformance does not guarantee strategy safety.",
          "Recomputed1,200assets/1,000shares=1.2,120-asset deposit produces100 shares under the stated simplified assumptions, resulting1,320/1,100=1.2."
        ]
      }
    },
    {
      "id": "yield-vaults-fact-limits",
      "articleSlug": "yield-vaults",
      "statement": "Limits: Maximum operations and previews have distinct semantics.",
      "sourceIds": [
        "source-0500eb916f66cd39"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-0500eb916f66cd39",
          "locator": "Specification; Security Considerations"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": null,
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T15:08:18.373Z",
        "reviewer": "automated independent verification",
        "notes": [
          "Read ERC-4626 convert/preview/max operation semantics and OpenZeppelin donation/inflation/rounding discussion. Previews do not override withdrawal limits and interface conformance does not guarantee strategy safety.",
          "Recomputed1,200assets/1,000shares=1.2,120-asset deposit produces100 shares under the stated simplified assumptions, resulting1,320/1,100=1.2."
        ]
      }
    },
    {
      "id": "yield-vaults-fact-rounding",
      "articleSlug": "yield-vaults",
      "statement": "Rounding: Share conversions and donation effects need careful implementation.",
      "sourceIds": [
        "source-e18b8696025f65d0"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-e18b8696025f65d0",
          "locator": "Security concern: Inflation attack; Custom behavior"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": null,
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T15:08:18.373Z",
        "reviewer": "automated independent verification",
        "notes": [
          "Read ERC-4626 convert/preview/max operation semantics and OpenZeppelin donation/inflation/rounding discussion. Previews do not override withdrawal limits and interface conformance does not guarantee strategy safety.",
          "Recomputed1,200assets/1,000shares=1.2,120-asset deposit produces100 shares under the stated simplified assumptions, resulting1,320/1,100=1.2."
        ]
      }
    }
  ],
  "sources": [
    {
      "id": "vault",
      "label": "ERC-4626: Tokenized Vaults",
      "publisher": "Ethereum Improvement Proposals",
      "url": "https://eips.ethereum.org/EIPS/eip-4626",
      "locator": "Specification; Security Considerations",
      "note": "Vault shares, assets, previews, withdrawal limits and rounding.",
      "version": "ERC-4626 final",
      "checkedAt": "2026-10-02",
      "recordId": "source-0500eb916f66cd39",
      "contentSha256": null
    },
    {
      "id": "vaultsecurity",
      "label": "ERC-4626 security considerations",
      "publisher": "OpenZeppelin",
      "url": "https://docs.openzeppelin.com/contracts/5.x/erc4626",
      "locator": "Security concern: Inflation attack; Custom behavior",
      "note": "Share conversion, rounding and donation-based exchange-rate manipulation.",
      "version": "OpenZeppelin Contracts 5.x",
      "checkedAt": "2026-10-02",
      "recordId": "source-e18b8696025f65d0",
      "contentSha256": null
    }
  ],
  "related": {
    "articles": [
      "defi-composability",
      "incentives-and-earned-fees",
      "smart-contract-audits",
      "vault-curators-allocators",
      "vault-management-performance-fees",
      "erc-4626-tokenized-vaults"
    ],
    "dossiers": [],
    "wallets": []
  },
  "revisionHistory": [
    {
      "date": "2026-10-02",
      "kind": "published",
      "summary": "First publication after primary-source research and independent automated verification."
    }
  ],
  "citation": "Degrees of Satoshi editorial project. “Yield vaults: shares, strategies and the meaning of redemption.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/yield-vaults/"
}