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What's vaults ?

Vaults are DeFi (Decentralized Finance) products that allow users to earn passive income through yield farming. Yield farming involves depositing funds into a smart contract to earn rewards in the form of interest or additional tokens.

Vaults typically use a combination of staking, liquidity provision, and algorithmic trading to generate returns for users. By depositing their funds into a vault, users can participate in these yield-generating activities without having to actively manage their investments.

The smart contract governing the vault manages the deposited funds and allocates them to various yield-generating strategies. The returns generated are then distributed to users in proportion to their deposited funds.

Vaults have become increasingly popular in the DeFi space due to the attractive returns they offer, as well as the ease of use and the reduced risk compared to traditional yield farming strategies.

It’s important to note that investing in vaults carries its own set of risks, including the risk of smart contract failure, market volatility, and loss of funds due to hacking or other security breaches. As with any investment, it is important to thoroughly research and understand the product before investing.