How Do Concrete Vaults Actually Work?

You deposit into a vault. You receive shares. Your balance starts to grow.

Then you see terms like eRate and NAV… and it gets confusing.

What do you actually own? Where is the yield coming from? And why does everyone keep saying “just give it time”?

Let’s break it down in the simplest way possible.

Start With the User Experience

Imagine you deposit funds into a Concrete vault.

You don’t get your exact tokens back. Instead, you receive vault shares.

From that point on:

• Your shares stay the same
• But their value increases over time

You open the dashboard and see numbers moving:

• eRate going up
• NAV changing

It feels like something is working… but it’s not obvious how.

What Vault Shares Actually Mean

Think of a vault like a pool of capital.

When you deposit, you’re not holding your original tokens anymore. You’re owning a slice of the entire pool.

That slice is your vault shares.

A simple way to picture it:

• The vault is a pie
• Shares are your slices
• The size of your slice doesn’t change
• But the pie itself can grow

So you don’t earn more shares. Your existing shares become more valuable.

What eRate Really Represents

eRate is simply the value of each share over time.

If the vault performs well:

• eRate increases
• Your shares are worth more

If nothing happens:

• eRate stays flat

So instead of tracking your balance directly, you’re tracking how much each share is worth.

Shares = how much you own eRate = what each piece is worth

Multiply both, and you get your total value.

Understanding NAV Without the Jargon

NAV (Net Asset Value) is just the total value of everything inside the vault.

That includes:

• All deposited capital
• All returns generated from strategies

Back to the simple analogy:

• NAV = the entire pie
• Shares = your slice of that pie

When NAV grows, the pie gets bigger. Your slice stays the same size, but it’s now worth more.

That’s how value increases without giving you new tokens.

Why Time Matters More Than You Think

This is where most people get it wrong.

Vaults are not designed for quick in-and-out moves.

They rely on:

• strategies that take time to play out
• compounding returns
• rebalancing across opportunities
• execution that includes costs (like gas and fees)

Think of it like planting a garden.

You don’t plant seeds and dig them up the next day to check growth. You give it time to compound.

Short-term:

• returns may look small
• movement may seem slow

Long-term:

• compounding kicks in
• strategies stabilize
• efficiency improves

Time is what unlocks the real value of DeFi vaults.

Vaults Are Actively Managed

A common misconception is that vaults just “hold” funds.

They don’t.

Concrete vaults are actively managed systems.

Behind the scenes:

• capital is deployed across strategies
• positions are adjusted over time
• opportunities are re-evaluated
• risk is managed continuously

A simple analogy:

The vault is like a chef in a kitchen. You provide the ingredients (capital), but the chef decides:

• what to cook
• when to adjust the recipe
• how to optimize the outcome

That’s what makes this managed DeFi, not passive farming.

How Everything Works Together

Now connect the dots.

• You deposit → receive shares
• The vault deploys capital → generates yield
• That yield increases NAV
• Increasing NAV raises eRate
• Higher eRate makes your shares more valuable

You’re not just earning yield.

You’re benefiting from:

• automated compounding
• smarter onchain capital deployment
• continuous optimization over time

The 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 = growth driver
• Management = optimization layer

That’s it.

Once you understand this, everything else becomes easier to follow.

Concrete vaults aren’t just about earning yield. They’re about how that yield is generated, managed, and compounded over time.

And that’s what makes them different.

Explore Concrete at app.concrete.xyz