What Is ERC-4626?
ERC-4626 is an Ethereum smart contract standard that defines a uniform interface for tokenized vaults in decentralised finance. Introduced as an Ethereum Improvement Proposal, it standardizes how yield-bearing vaults interact with underlying assets, creating consistency across different DeFi protocols.
ERC-4626 is self-custodial and offers onchain trading strategies.
The standard enables:
Vault aggregators to easily integrate multiple yield sources
Portfolio management tools to track vault positions uniformly
Cross-protocol strategies that move assets between different vaults
Automated yield optimization across various platforms
Common ERC-4626 vault applications:
Yield farming vaults that deploy assets across multiple protocols
Lending optimisation representing deposits in money markets
Liquidity provision for automated market makers
Strategy vaults implementing complex DeFi trading strategies
ERC-4626 cannot be applied for all strategies, as it need syncrhonous withdrawals and this is not possible for all trading. There exist ERC-7540 extension for these applications, and this extension is implemented e.g. bt Lagoon protocol.
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