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Concrete Vault Shares

ct[asset] tokens are ERC-20 vault shares that users receive when they deposit the underlying asset into a Concrete vault. The token name and symbol (e.g., "Concrete Senior USDC" / "ctSrUSDC") are set when the vault is deployed.

A user's share balance does not change over time on its own — what changes is the value of each share. Concrete vaults follow the ERC-4626 standard, where yield accrues by increasing the share's exchange rate rather than by minting more shares to the user.

Per-user yield works as follows: When a user deposits, they receive shares priced at the current exchange rate: shares = assets × totalSupply / totalAssets (with a +1 in numerator and denominator to prevent inflation attacks).

As strategies generate yield, the vault's totalAssets increases while totalSupply stays the same, so each share is now redeemable for more of the underlying asset. The share price is totalAssets / totalSupply.

Each user's share of the yield is therefore proportional to the number of shares they hold. Their realised yield equals the difference between the assets they can redeem now (convertToAssets(shares)) and what they originally deposited.

Yield is recalculated on-chain whenever accrueYield() runs, which is triggered automatically on every deposit, mint, withdraw, and redeem via the withYieldAccrual modifier.

For example, if a user deposits 1 ETH into an ETH vault when the share price is 1:1, they receive approximately 1 ctETH. Over time, as the vault generates yield, each ctETH becomes redeemable for more than 1 ETH — so 1 ctETH might later be worth 1.04 ETH after a 4% yield period. Share counts don't change; share value does.

Advantages of ct[assets] Over Similar Tokens in DeFi​

How ct[assets] Are Structured​

ct[assets] are structured as ERC-20 tokens, providing flexibility and compatibility within the Ethereum ecosystem. Users can transfer or swap these tokens between wallets or protocols.

  • Type: ERC-20 ct[assets] adhere to the ERC-20 standard, ensuring compatibility and interoperability within the DeFi ecosystem.
  • Yield-Bearing: ct[assets] accrue yield from their respective vaults. Holders can claim the yield accumulated during their ownership period, giving them flexibility over when they receive returns.
  • Transferrable: ct[assets] are fully transferrable, meaning holders can move them between wallets or sell them, allowing for the development of a secondary market. This enables users to trade their positions based on the embedded value of the underlying assets and their projected future yields.
  • Redeemable: Users can redeem ct[assets] to withdraw their original assets plus the accrued yield. When redeemed, the ct[assets] are burned, and the equivalent underlying tokens are returned to the user.

Tokenization of Deposits​

Initially, users can only deposit into Concrete’s predefined vaults, which are programmed with optimized strategies. These vaults have varying risk profiles depending on the type of asset (e.g., ETH, BTC) and the specific chain.

When a user deposits assets (e.g., ETH) into Concrete’s vaults, they receive ct[assets] (like ctETH) in return. These tokens function as a digital receipt, confirming the deposit and entitling the holder to the underlying assets plus any accrued interest.

Example: How User Balances Increase Over Time​

On Day 1, the user holds 1 ctETH (assuming 1:1 share price at deposit), redeemable for 1 ETH. After 90 days, if the vault has generated approximately 3.75% over the period, the same 1 ctETH is now redeemable for ~1.0375 ETH. The share count is unchanged; the exchange rate has moved. The dashboard reflects this through the underlying-asset balance, not a change in ctETH quantity.

How Yield Accrues with ct[assets]​

The accrued yield is based on the underlying performance of the vault strategies, and users can claim these yields when they choose.

Concrete currently offers flexibility in how yields are accrued and presented.

Yield Accrual Tracking​

Yield enters the vault when strategies report a higher allocated value than their last recorded value. The vault updates its cached total assets, then accrues management and performance fees by minting shares to fee recipients. Existing shareholders see this reflected as a higher exchange rate per share. Late depositors enter at the prevailing share price, which already accounts for prior yield — preserving fairness without per-user timestamps.

Yield Calculation​

Yield is calculated from the underlying performance of the vault's strategies, including APY across allocated protocols, emission rates, and other relevant factors. The result is reflected in the share-to-asset exchange rate. A holder's redeemable value at any point is convertToAssets(shares) at the current exchange rate.

How to Withdraw Liquidity from the Vaults​

When a user wants to withdraw liquidity from the protocol, they can redeem or burn their ct[assets].

To redeem ct[assets], users simply convert their tokens back into the original asset. The system ensures that users receive the value of their deposit plus accrued yield. If liquidity is fully available, the process is immediate. However, for larger withdrawals or when liquidity is tied up in other strategies (funds may be deployed in other money markets), the platform might implement a queuing mechanism to manage the flow of funds effectively. This ensures stability and transparency in the withdrawal process.

Redemption Queue​

If immediate liquidity is unavailable, the protocol calculates redemption availability based on current utilization rates and forecasted redemption demands. If immediate redemption isn't possible, the user’s request enters a queue, ensuring that liquidity is released as it becomes available.