# How Do Concrete Vaults Actually Work?

**Published by:** [Stacklyn](https://paragraph.com/@stacklyn/)
**Published on:** 2026-03-24
**URL:** https://paragraph.com/@stacklyn/how-do-concrete-vaults-actually-work

## Content

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. 1⃣ Start With the User Perspective 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? 2⃣ Vault Shares & eRate — Explained Simply 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 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. 3⃣ NAV — The Total Pool 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 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. 4⃣ Why Time Matters This is where most people misunderstand vaults. Vaults are not designed for short-term flipping. They are built for time-based growth. 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 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. 5⃣ Active Management (Not Passive) A common misconception: Vaults are “set and forget.” That’s only half true. Behind the scenes, Concrete vaults are actively managing capital. What’s Actually Happening Capital is: deployed across different strategies rebalanced as conditions change adjusted based on risk and yield 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. 6⃣ How This Creates Better Outcomes Now connect everything: Automated compounding → reinvests rewards continuously Rebalancing → captures better opportunities Onchain capital deployment → keeps funds active Managed DeFi → reduces user effort 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. 7⃣ The Simple Mental Model 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 Final Thought 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. 🚀 Explore Concrete at app.concrete.xyz 🚀

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