# Vault

> A DeFi smart contract that automates a strategy on behalf of depositors.

Canonical URL: https://fudfomo.co/glossary/vault
Source: What The Block! Dictionary v1.0 (last updated 2026-04-25), browsable at https://wtb.fudfomo.co.

## Definition

A vault is a smart contract you deposit into and that automatically executes a strategy. Strategies range from simple lending to layered yield farming routes that move funds between protocols to chase the best rate.

Vaults save users from manually managing positions, but they introduce extra smart contract risk and often charge a performance fee. Always check what the vault actually does and how often it has been audited.

## Related terms

- [DeFi](https://fudfomo.co/glossary/defi): Decentralised finance. Apps that offer lending, trading, and saving on a blockchain instead of through a bank.
- [Yield Farming](https://fudfomo.co/glossary/yield-farming): Moving crypto between DeFi apps to earn the highest rewards. Higher yields usually mean higher risk.
- [Lending Protocol](https://fudfomo.co/glossary/lending-protocol): A DeFi app that lets users deposit crypto to earn interest and others borrow against collateral.
- [Liquidity Pool](https://fudfomo.co/glossary/liquidity-pool): A shared pot of two tokens that lets people trade between them on a decentralised exchange.

## See the full catalogue

What The Block! covers more than 2,000 plain-English crypto terms, delivered as embeddable hover-state tooltips for crypto exchanges. https://wtb.fudfomo.co