ERC-4626

The standard separates two quantities: assets (the underlying token deposited) and shares (the issued participations). Its key methods include asset and totalAssets to read the underlying and the managed balance, deposit and mint to enter, withdraw and redeem to exit, and convertToShares and convertToAssets for the share price. It adds simulation and limit functions such as previewDeposit and maxWithdraw, plus the Deposit and Withdraw events. The share price grows as the vault earns yield, without any rebase. It is an extension of ERC-20: the share itself is an ERC-20.

It standardizes the interface for yield vaults, which used to be ad hoc per protocol. That common interface lets aggregators and routers integrate any vault without custom code, and it underpins composability in yield DeFi. As a known best practice, empty vaults should mitigate the first-deposit inflation attack with a dead initial deposit or a decimals offset. ERC-4626 is in Final status, created on 22 December 2021 by Joey Santoro, transmissions11, Jet Jadeja, Alberto Cuesta Cañada and Señor Doggo.

Yearn Finance (v3 vaults), Aave's ERC-4626 wrappers over its aTokens, Morpho's vaults and 4626 wrappers over Lido's stETH. For tokenization it is the natural building block for composable yield products, for example tokenized money market funds or tokenized treasuries that earn interest.