Module 6.1｜Introduction of Vault

What is DeFi Vault

In the context of crypto, a decentralized finance (DeFi) vault is typically defined as a highly secured, smart contract-based place to store crypto tokens or coins.It could be a service or smart contract made to securely store assets, frequently with added security features like multi-signature access. Because vaults provide more security measures than standard wallets, they are essential for businesses and institutions that hold large quantities of cryptocurrency.

Blockchain Use-Cases for Vaults

These days, DeFi vaults do more than merely store cryptocurrency; they are automated financial platforms. After depositing their cryptocurrency assets into these vaults, users use pre-established strategies to invest and reinvest their money across several DeFi protocols and blockchains in order to produce dividends.

There are several common uses for the blockchain's vault, yield farming is one of the main use cases. In order to optimize returns, vaults continuously compound and reinvest the incentives and interest earned from staking users' money in new ventures. Vaults try to find the best lending, staking, trading, and arbitrage possibilities so that the deposited cryptocurrency assets can keep growing.