Definition ∞ A yield vault is a smart contract or an automated strategy that pools users’ digital assets to collectively seek and optimize returns across various decentralized finance protocols. These vaults automate complex yield-generating strategies, aiming to maximize profits for their depositors. They simplify participation in advanced DeFi opportunities.
Context ∞ News in the decentralized finance space regularly reports on the performance and risks associated with different yield vaults. Discussions often center on their strategies for maximizing returns, the security audits they undergo, and the potential for impermanent loss or smart contract vulnerabilities. Users must assess these factors carefully.
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