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How Do Concrete Vaults Actually Work?

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You deposit into a vault

You receive shares

Your balance starts to grow

Then you notice terms like eRate and NAV… and suddenly it feels less straightforward. So what’s really going on under the hood?
Let’s break it down in a way that actually makes sense.

1. The User Perspective

Imagine this: You deposit funds into one of the Concrete vaults. Immediately:

• You receive vault shares
• Your dashboard shows an eRate
• You see a growing balance over time

Naturally, the questions start:

• What do these shares actually represent?
• Why is the number increasing?
• Where is the yield coming from?

To understand all of this, you only need one simple idea:

You don’t just deposit money, you own a piece of a system that is actively working.

2. Vault Shares & eRate (Made Simple)

Think of a vault like a large jar.

• Everyone deposits into the jar
• The jar is divided into slices
• Each slice is a vault share

When you deposit:

• You receive shares based on how much of the jar you own

Now, what about eRate?

• eRate is simply the value of each share
• As the vault earns yield, the value of each share increases

So instead of your number of shares increasing, what actually grows is:

The value of each share you already own

Simple analogy:

• Shares = number of slices you own
• eRate = how valuable each slice is

As the vault performs well, each slice becomes more valuable.

3. Understanding NAV Without the Jargon

Now let’s talk about NAV (Net Asset Value). Strip away the technical language and it becomes very simple:

• NAV = total value of everything inside the vault
  That includes:
• All deposits
• All generated yield
• All active strategies

So:

• NAV = the whole jar
• Shares = your portion of the jar

If the NAV increases:

• The vault has grown in value
• Your shares are now worth more

You don’t need to do anything. The system handles it.

4. Why Time Matters (More Than You Think)

This is where many people misunderstand DeFi vaults. Vaults are not designed for quick in-and-out activity.

Why?

Because:

• Strategies need time to generate meaningful yield
• There are costs involved (gas fees, execution, rebalancing)
• Markets move in cycles, not straight lines

Think of it like a garden:

You plant seeds (your deposit). You don’t dig them up the next day to check growth, instead:

• You water them (strategies run)
• You give them time (yield accumulates)
• You harvest later (withdraw with gains)

The longer you stay:

• The more automated compounding works in your favour
• The more stable your returns become

Time is what unlocks the real value of Concrete vaults.

5. Active Management (Not Just Sitting Idle)

A common misconception is that vaults simply “hold” funds. That’s not what happens here. Concrete operates as managed DeFi.
Behind the scenes:

• Capital is deployed into different strategies
• Positions are adjusted based on market conditions
• Opportunities are continuously evaluated

Think of it like a chef:

You provide the ingredients (your deposit).
The chef (the vault system) decides:

• What to cook
• When to adjust the recipe
• How to optimise the outcome

This is on-chain capital deployment in action. Your funds are always working, not waiting.

6. Connecting It All Together

Now let’s tie everything into outcomes. Here’s what’s happening over time:

• Yield is generated through strategies
• That yield increases the NAV
• Increased NAV raises the eRate
• Higher eRate means your vault shares are worth more

At the same time:

• Rebalancing captures better opportunities
• Automated systems optimise performance
• Compounding accelerates growth

So you’re not just earning yield…
You’re benefiting from:

• How the yield is generated
• How it is managed
• How it compounds over time

7. A Simple Mental Model

If you remember nothing else, remember this:

• Vault = pooled capital system
• Vault shares = your ownership
• NAV = total value of the vault
• eRate = value of your shares
• Time = growth engine
• Management = optimisation layer

Put together:
You deposit into a system that actively deploys capital, compounds returns, and increases the value of your ownership over time.

Final Thought

Concrete vaults take the complexity of DeFi and turn it into something much simpler:

Deposit → Own → Grow

The longer you stay, the more the system works in your favour.

Explore More About Concrete at:

app.concrete.xyz