How Do Concrete Vaults Actually Work?

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You deposit into a vault.
You receive shares.
Over time, your balance increases.

Sounds simple — but if you’ve ever opened a DeFi app and seen terms like eRate or NAV, you’ve probably paused and thought:

“What’s actually going on here?”

Let’s break it down in a way that actually makes sense.

1. Starting From Your Perspective

Imagine you just deposited funds into a Concrete vault.

Right away:

• Your tokens are converted into vault shares
• Your wallet now shows a position tied to those shares
• You notice metrics like eRate and NAV

But here’s the confusing part:

You didn’t do anything after depositing — yet your position starts changing over time.

So what’s happening?

2. Vault Shares & eRate — Think Ownership

The easiest way to understand vault shares is this:

The vault is like a pool of capital
Shares represent your slice of that pool

When you deposit:

• You don’t just “put money in”
• You own a portion of the vault

Now, what about eRate?

Think of eRate as:

the value of each share

At the beginning:

• 1 share might equal $1

Over time:

• That same share might be worth $1.05, $1.10, or more

Important:

• Your number of shares stays the same
• But the value per share increases

So your growth doesn’t come from getting more tokens —
it comes from your shares becoming more valuable

3. NAV — The Total Pool

NAV stands for Net Asset Value, but let’s keep it simple:

NAV = total value inside the vault

That includes:

• Your deposit
• Everyone else’s deposits
• Plus any yield generated

So:

• NAV = the whole pie
• Your shares = your slice of the pie

If the vault performs well:

• NAV increases
• Your slice becomes more valuable

That’s why your position grows.

4. Why Time Matters (More Than You Think)

Here’s where many people misunderstand DeFi vaults.

They expect instant results.

But vaults aren’t built for quick flips — they’re designed for growth over time.

Why?

1. Strategies need time

The vault deploys capital into opportunities that generate yield.
These strategies don’t produce results instantly.

2. Costs exist

Moving capital onchain involves:

• Gas fees
• Trading costs
• Execution delays

Jumping in and out quickly can cancel out gains.

3. Compounding isn’t immediate

Yield builds on itself — but only if you stay in long enough.

Think of it like planting a tree:

• Day 1: nothing changes
• Week 1: still small
• Month 3+: now you see growth

Vaults work the same way.

5. Active Management — Not Just Sitting Idle

A key thing to understand:

Concrete vaults are not passive storage

Your funds aren’t just sitting there.

They are:

• Deployed across different strategies
• Rebalanced over time
• Adjusted based on market conditions

Think of the vault like a professional operator:

• Moving capital where it performs best
• Reducing exposure when risk increases
• Optimizing returns continuously

Or even simpler:

You bring the capital
The vault does the work

6. How It All Comes Together

Now let’s connect the dots.

When you deposit into a Concrete vault:

1. You receive shares
2. Your shares represent ownership of the vault
3. The vault actively deploys capital
4. Yield is generated from strategies
5. That yield increases the NAV
6. Higher NAV increases the eRate
7. Your shares become more valuable

Over time:

• Compounding kicks in
• Rebalancing improves efficiency
• Your position grows — without manual effort

This is what makes managed DeFi powerful.

You’re not just earning yield —
you’re benefiting from how that yield is managed and optimized

7. A Simple Mental Model

If you remember nothing else, remember this:

• Vault = pooled capital system
• Shares = your ownership
• eRate = value per share
• NAV = total vault value
• Time = what unlocks growth
• Management = what improves results

Concrete vaults simplify something complex:

automated compounding
onchain capital deployment
active strategy management

All wrapped into a system where you just deposit — and let it work.

Explore Concrete at app.concrete.xyz