What Is ERC-7540?
ERC-7540 is EVM vault standard. In 7540, deposits and redemptions are not instantly processed in the same transaction, but queue for the later processing.
ERC-7540 is an Ethereum Improvement Proposal (EIP) that extends the ERC-4626 tokenized vault standard by introducing support for asynchronous deposit and redemption processes. The ERC-4626 standard defines a framework for yield-bearing vaults—smart contracts that manage assets and provide rewards to token depositors—but it is limited to atomic (immediate) deposits and redemptions up to a certain threshold, beyond which no further actions can be processed. ERC-7540 addresses this limitation by enabling asynchronous workflows, allowing users to request deposits or redemptions and track their status over time, rather than requiring instant execution.
Key features of ERC-7540 include: - Asynchronous Requests: New methods are added to initiate deposit or redemption requests, with the ability to monitor their progress (e.g., pending or claimable status). - Compatibility with ERC-4626: It builds on the existing standard, using ERC-4626’s deposit, mint, withdraw, and redeem functions to execute requests once they are claimable, while overriding certain behaviors for asynchronous flows. - Flexibility: Implementations can choose to support asynchronous deposits, redemptions, or both, depending on the use case. - Enhanced Composability: By supporting delayed or asynchronous actions, it improves the usability of yield-bearing tokens in decentralized finance (DeFi), especially for systems requiring time-dependent operations.
This proposal is particularly beneficial for protocols involving real-world assets (RWAs), cross-chain lending, and liquid staking, where immediate processing may not always be feasible. Introduced in October 2023, ERC-7540 aims to enhance Ethereum’s functionality and scalability, making it more adaptable to complex financial applications.