ethereum · lightclient · Jan 8, 2022 · Jan 4, 2022 · Jan 4, 2022 · Jan 4, 2022
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+# Yield Bearing Vault Standard
+
+eip: 4626
+title: Yield Bearing Vault Standard
+description: A standard for yield bearing vaults.
+author: Author: Joey Santoro (@joeysantoro), t11s (@transmissions11), Jet Jadeja (@JetJadeja)
+discussions-to: <URL>
+status: Draft
+type: Standards Track
+category: ERC
+created: 2021-12-22
+
+## Simple Summary
+
+A standard for yield bearing vaults.
+
+## Abstract
+
+The following standard allows for the implementation of a standard API for yield bearing vaults within smart contracts. This standard provides basic functionality for depositing and withdrawing tokens and reading balances with an optional extension for tokenized vaults using ERC-20.
+
+## Motivation
+
+Yield bearing vaults have a lack of standardization leading to diverse implementation details. Some various examples include lending markets (Compound, Aave, Fuse), aggregators (Yearn, Rari Vaults, Idle), and intrinsically interest bearing tokens (xSushi). This makes integration difficult at the aggregator or plugin layer for protocols which need to conform to many standards. This forces each protocol to implement their own adapters which are error prone and waste development resources.
+
+A standard for yield bearing vaults will allow for a similar cambrian explosion to ERC-20, unlocking access to yield in a variety of applications with little specialized effort from developers.
+
+
+## Specification
+
+### Methods
+
+#### deposit
+
+`function deposit(address _to, uint256 _value) public returns (uint256 _shares)`
+
+Deposits `_value` tokens into the vault and grants ownership of them to `_to`.
+
+MAY return a pro-rata ownership `_shares` value corresponding `_value`, if not MUST return `0`.
+
+MAY represent `_shares` using internal accounting or an ERC-20 token. 
+
+If pro-rata shares ownership is implemented, the vault SHOULD implement `balanceOf`, `redeem`, `totalSupply` and `exchangeRate`.
+
+
+#### withdraw
+
+`function withdraw(address _to, uint256 _value) public returns (uint256 _shares)`
+
+Withdraws `_value` tokens from the vault and transfers them to `_to`. 
+
+MAY return a pro-rata ownership `_shares` value corresponding to `_value`,  if not MUST return `0`.
+
+
+#### totalHoldings
+`function totalHoldings() public view returns (uint256)`
+
+Returns the total amount of underlying tokens held/managed by the vault.
+
+
+#### balanceOfUnderlying
+`function balanceOfUnderlying(address _owner) public view returns (uint256)`
+
+Returns the total amount underlying tokens held in the vault for `_owner`.
+
+#### underlying
+`function underlying() public view returns (address)`
+
+Returns the address of the token the vault uses for accounting, depositing, and withdrawing. 
+
+SHOULD return a token implementing the ERC-20 standard.
+
+
+#### totalSupply
+
+`function totalSupply() public view returns (uint256)`
+
+Returns the total number of unredeemed vault shares in circulation.
+
+OPTIONAL - This method is only needed for vaults that implement a pro-rata share mechanism for deposits.
+
+#### balanceOf
+
+`function balanceOf(address _owner) public view returns (uint256)`
+
+Returns the total amount of vault shares the `_owner` currently has.
+
+OPTIONAL - This method is only needed for vaults that implement a pro-rata share mechanism for deposits.
+
+#### redeem
+
+`function redeem(address _to, uint256 _shares) public returns (uint256 _value)`
+
+Redeems a specific number of `_shares` for underlying tokens and transfers them to `_to`. 
+
+MAY return a pro-rata ownership `_shares` value corresponding `_value`, if not MUST return `0`.
+
+OPTIONAL - This method is only needed for vaults that implement a pro-rata share mechanism for deposits.
+
+#### exchangeRate
+
+`function exchangeRate() public view returns (uint256)`
+
+The amount of underlying tokens one `baseUnit` of vault shares is redeemable for. 
+
+e.g. `_shares * exchangeRate() / baseUnit() = _value`.
+
+`exchangeRate() * totalSupply()` MUST equal `totalHoldings()`.
+
+OPTIONAL - This method is only needed for vaults that implement a pro-rata share mechanism for deposits.
+
+#### baseUnit
+
+`function baseUnit() public view returns(uint256)`
+
+The decimal scalar for vault shares and operations involving `exchangeRate()`.
+
+OPTIONAL - This method is only needed for vaults that implement a pro-rata share mechanism for deposits.
+
+
+### Events
+
+#### Deposit
+
+MUST be emitted when tokens are deposited into the vault.
+
+`event Deposit(address indexed _from, addres indexed _to, uint256 _value)`
+
+Where `_from` is the user who triggered the deposit and approved `_value` underlying tokens to the vault, and `_to` is the user who is able to withdraw the deposited tokens. 
+
+
+#### Withdraw
+
+MUST be emitted when tokens are withdrawn from the vault by a depositor.
+
+`event Withdraw(address indexed _owner, addres indexed _to, uint256 _value)`
+
+Where `_from` is the user who triggered the withdrawal and held `_value` underlying tokens in the vault, and `_to` is the user who received the withdrawn tokens.
+
+
+## Rationale
+
+The vault interface is designed to be optimized for minimal implementation and integration logic while maintaining flexibility for both parties. Details such as accounting and allocation of deposited tokens are intentionally not specified, as vaults are expected to be treated as black boxes on-chain and inspected off-chain before use.
+
+## Reference Implementation
+
+[Solmate Minimal Implementation](https://github.com/Rari-Capital/solmate/pull/88) - a tokenized vault using the ERC-20 extension with hooks for developers to add logic in deposit and withdraw.
+
+[Rari Vaults](https://github.com/Rari-Capital/vaults/blob/main/src/Vault.sol) are an implementation that is nearly ready for production release. Any discrepancies between the vaults abi and this ERC will be adapted to conform to the ERC before mainnet deployment.
+
+## Security Considerations
+
+This specification has similar security considerations to the ERC-20 interface. Fully permissionless yield aggregators, for example, could fall prey to malicious implementations which only conform to the interface but not the specification.
+
+## Copyright
+
+Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).