Strategies
Vault
Yield Vault
Pooled strategy issuing shares in managed assets
Definition
A yield vault pools deposits and executes a defined investment strategy, issuing shares whose value reflects managed assets after gains, losses and fees. Vault can also mean a collateralized debt position; neither meaning implies safe custody or guaranteed yield.
Example
A vault holds $100,000 against 100,000 shares. You buy 1,000 shares for $1,000. After a net gain of $5,050 on the enlarged $101,000 pool, each of 101,000 shares is worth $1.05 and your claim is $1,050.
How it works
Deposits mint shares using the current asset-to-share ratio. The strategy deploys capital and harvests returns; withdrawals burn shares and return available assets, possibly after unwinding positions.
Risks to Consider
- A strategy can lose money through leverage or LP inventory changes
- Incorrect share accounting can transfer value between depositors
- Withdrawals can queue if strategy assets cannot be unwound
Common Questions
Is a yield vault the same as a CDP vault?
No. A yield vault manages investments; a CDP vault locks collateral to issue debt. Check which meaning the protocol uses before depositing.
