# How Do Concrete Vaults Actually Work?

By [Stacklyn](https://paragraph.com/@stacklyn) · 2026-03-24

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![](https://storage.googleapis.com/papyrus_images/948087f31cb4d8f4d5429bdcf0e0485a7c63981fe58a6f0da0852dbb2e07aa20.png)

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

Simple on the surface.

But if you’ve ever looked at numbers like **eRate** or **NAV**, you’ve probably asked:

**“What do these actually mean?”**

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

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1⃣ **Start With the User Perspective**
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Imagine this:

You deposit USDT into a **Concrete vault**.

Immediately, you receive something called **vault shares**.  
Your wallet now shows a balance — not just in tokens, but in shares.

Over time, you notice something interesting:

Your share value increases.

You didn’t move funds.  
You didn’t farm manually.  
You didn’t rebalance anything.

Yet your position is growing.

So what’s happening under the hood?

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2⃣ **Vault Shares & eRate — Explained Simply**
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Let’s start with the basics.

### **Vault Shares = Your Ownership**

Think of the vault like a big pool of capital.

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

👉 If the vault is a pizza:

*   The whole pizza = total capital
    
*   Your shares = your slices
    

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### **eRate = Value Per Share**

Now comes the key metric: **eRate**.

eRate tells you:

> **How much each share is worth**

At the beginning, 1 share might equal $1.

But as the vault generates yield, that changes.

*   1 share → $1.02
    
*   then → $1.05
    
*   then → $1.10
    

You still own the same number of shares.

But each share becomes more valuable over time.

That’s how your balance grows.

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3⃣ **NAV — The Total Pool**
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Now let’s talk about **NAV (Net Asset Value)**.

In simple terms:

> **NAV = total value of everything inside the vault**

It includes:

*   deposited capital
    
*   earned yield
    
*   active positions
    

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### **How It Connects**

*   **NAV** = the full pool
    
*   **Shares** = your portion
    
*   **eRate** = value per share
    

👉 When NAV increases → share value increases → your balance grows.

You don’t need to do anything manually.

The system updates it for you.

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4⃣ **Why Time Matters**
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This is where most people misunderstand vaults.

Vaults are not designed for short-term flipping.

They are built for **time-based growth**.

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### **Why?**

Because yield generation takes time:

*   strategies need time to perform
    
*   rewards need time to accumulate
    
*   compounding needs time to accelerate
    

There are also real-world frictions:

*   gas costs
    
*   execution timing
    
*   rebalancing intervals
    

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### **Think of It Like a Garden** 🌱

You don’t plant seeds and expect results overnight.

*   Day 1 → nothing
    
*   Week 1 → small growth
    
*   Month 1 → visible results
    
*   Long-term → exponential growth
    

Vaults work the same way.

> **Time is what unlocks compounding.**

Short-term noise exists.  
Long-term growth is where the real value is.

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5⃣ **Active Management (Not Passive)**
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A common misconception:

Vaults are “set and forget.”

That’s only half true.

Behind the scenes, **Concrete vaults are actively managing capital**.

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### **What’s Actually Happening**

Capital is:

*   deployed across different strategies
    
*   rebalanced as conditions change
    
*   adjusted based on risk and yield
    

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### **Simple Analogy** 🍳

Think of the vault like a chef in a kitchen.

You bring the ingredients (your capital).

The chef:

*   chooses the recipe (strategy)
    
*   adjusts seasoning (risk/reward)
    
*   switches dishes when needed (rebalancing)
    

You don’t cook.

But your meal keeps improving.

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6⃣ **How This Creates Better Outcomes**
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Now connect everything:

*   **Automated compounding** → reinvests rewards continuously
    
*   **Rebalancing** → captures better opportunities
    
*   **Onchain capital deployment** → keeps funds active
    
*   **Managed DeFi** → reduces user effort
    

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### **The Result**

You’re not just earning yield.

You’re benefiting from:

> **how that yield is managed over time**

And that makes a big difference.

Because in DeFi:

*   timing matters
    
*   execution matters
    
*   consistency matters
    

Vaults optimize all three.

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7⃣ **The Simple Mental Model**
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Let’s bring it all together:

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

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**Final Thought**
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Concrete vaults take complex DeFi strategies and turn them into something simple:

You deposit once.  
The system does the rest.

No constant monitoring.  
No manual compounding.  
No chasing every new strategy.

Just structured, **automated onchain capital deployment**.

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🚀 **Explore Concrete at app.concrete.xyz** 🚀

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*Originally published on [Stacklyn](https://paragraph.com/@stacklyn/how-do-concrete-vaults-actually-work)*