How Do Concrete Vaults Actually Work?

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You deposit into a vault.
You receive shares.
Your balance grows over time.

Simple, right?

But once you open the interface, you start seeing terms like eRate, NAV, and vault shares — and suddenly it’s not so obvious what’s actually happening.

So let’s break it down.

No jargon. No complexity. Just a clear mental model of how Concrete vaults work.

Starting From the User Perspective

Imagine this:

You deposit your funds into a vault.

After depositing:

• You receive vault shares
• You see metrics like eRate and NAV
• Over time, your position grows

At first glance, it raises a natural question:

What do these numbers actually mean?

To understand that, we need to start with the basics.

Vault Shares & eRate (Made Simple)

Think of a vault like a pool of capital.

When you deposit, you don’t just “put money in.”
You receive shares of that pool.

🧩 Vault Shares

Vault shares represent your ownership.

If you own 10% of the shares, you own 10% of the vault.

📈 eRate

The eRate tells you how much each share is worth.

At the beginning:

• 1 share = $1 (example)

Over time:

• 1 share = $1.05
• then $1.10
• then $1.20

The number of shares you hold stays the same.
But the value of each share increases.

That’s how your position grows.

Understanding NAV Without Complexity

Now let’s talk about NAV.

NAV stands for Net Asset Value — but don’t worry about the term.

Just think of it like this:

• NAV = total value of everything inside the vault
• It includes all capital + generated yield

Simple analogy:

• Vault = a big jar of money
• NAV = how full the jar is
• Shares = your slice of that jar

If the jar grows bigger, your slice becomes more valuable — even if the slice size stays the same.

Why Time Matters

This is one of the most important concepts.

Vaults are not designed for short-term gains.

Why?

Because:

• Strategies need time to generate yield
• Transactions (like rebalancing) have costs
• Markets move in cycles
• Compounding works gradually

Think of it like planting a tree.

You don’t dig it up every day to check growth.
You let it grow over time.

The longer your capital stays in the vault:

• The more it compounds
• The more strategies can optimize
• The more value accumulates

Time is what unlocks the full potential of the vault.

Vaults Are Actively Managed

Another common misconception:

Vaults are not passive.

They don’t just sit there holding assets.

Instead, they actively manage capital.

Think of it like a system working behind the scenes:

• Capital is deployed into different strategies
• Positions are rebalanced over time
• Allocations adjust based on conditions

A simple analogy:

The vault is like a chef in a kitchen.

You provide the ingredients (your capital).
The system decides how to use them to create the best outcome.

How Everything Comes Together

Now let’s connect the dots.

When you deposit into a Concrete vault:

• You receive vault shares (your ownership)
• The vault deploys your capital
• Yield is generated and reinvested (automated compounding)
• The NAV grows over time
• The eRate increases, making each share more valuable

You don’t need to:

• Claim rewards
• Rebalance positions
• Move between protocols

The system handles it.

The Simple Mental Model

Here’s the easiest way to think about it:

• Vault = pooled capital system
• Shares = your ownership
• eRate = value per share
• NAV = total vault value
• Time = growth driver
• Management = optimization layer

That’s it.

No need to overcomplicate it.

Final Thought

Concrete vaults are part of a bigger shift in DeFi:

From manual management → to managed DeFi infrastructure
From chasing yield → to onchain capital deployment
From complexity → to simple, automated systems

Once you understand the model, everything becomes intuitive.

Explore Concrete at 👉 app.concrete.xyz