What Is Vault?
In decentralised finance, a vault refers to a smart contract that manages assets, in non-custodial manner, for several stakeholders. Usually when you deposit to a vault you receive share or liquidity provider tokens as a return.
Most vaults are self-custodial and allow you to withdraw your assets at any time.
Common 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
A common vault smart contract standards are ERC-4626 and ERC-7540. An example of vault protocol are Lagoon and Enzyme protocol.
See also