DeFi vaults run from simple single-protocol products to complex vehicles that operate across many protocols and chains, and a layer of consumer-facing products now sits on top of them. This article shows how vaults are used in practice, with reference to systems operating today. It moves from single-protocol earn vaults, through multi-strategy vaults, to the synthetic dollars, exchange yield programs, and tokenized-asset strategies built on vault infrastructure. The throughline is that the same structure does very different things depending on how it is configured.
Two terms recur throughout:
An earn vault is a single-protocol vault that spreads one deposited asset across a set of isolated lending markets.
A multi-strategy vault deploys capital across many protocols and strategies at once.
Both are run by a professional manager who sets the parameters and the allocations, and a depositor receives a token representing a share of the pool.
Single-Protocol Curation in Practice
The earn vault is the most widely adopted modern design. The pattern was pioneered by Morpho through its MetaMorpho product. A user deposits one asset, typically a stablecoin, and the vault distributes it across isolated markets according to the parameters set by the curator, the manager responsible for the vault's risk settings. The depositor holds a single position at the vault level, while the vault holds many positions at the market level.
The two-level structure is what makes the design legible. The depositor's single position abstracts a set of underlying positions that remain individually visible. An evaluator who wants to understand the exposure does not have to trust a summary: they can read the vault's current allocation across the markets beneath it and see exactly where the capital sits at that moment. The abstraction simplifies the depositor's experience while leaving the underlying composition visible to anyone who chooses to look, which is the property that distinguishes a transparent vault from a packaged product that conceals its contents.
The clearest way to see the curator's effect is to compare two vaults that accept the same asset. Consider two ETH earn vaults on Morpho, deployed on Ethereum, run by different curators. Once the ETH enters each vault, it is distributed across different sub-markets with different collateral pairings, such as staked ETH derivatives, wrapped Bitcoin, or liquid restaking tokens. Each curator sets its maximum allocations independently, applying its own framework and construction logic. The asset a depositor supplies is identical in both cases, but the exposure the depositor takes on is different. One vault might concentrate in conservative staked ETH markets, while another reaches for higher yield in restaking markets that carry more risk. A depositor can examine the current allocation, understand the resulting exposure, and choose the vault whose composition matches a defined risk tolerance.
The same pattern appears beyond Morpho. Euler has launched Euler Earn, a newer product implementing the same concept within its modular vault system. On Solana, Kamino Earn has seen significant adoption with a functionally similar design, built outside the ERC-4626 standard because of the different virtual machine architecture. The core mechanic holds everywhere: one asset in, curator-designed allocation across isolated markets, organic yield returned to the depositor.
The spread of the same mechanic across different protocols, and even different virtual machines, is itself informative. It indicates that the earn vault is a general pattern that re-emerges wherever isolated lending markets and a curation layer exist together. The implementation details differ and the underlying standard may differ, while the core relationship between depositor, curator, and isolated markets stays the same. A reader who understands the pattern in one venue can evaluate it in another, because the structure transfers even when the code does not.
The properties that follow are simplicity, transparency, and strong non-custodial guarantees, meaning the depositor keeps ownership of the assets throughout. The curator's powers are well defined and constrained by the protocol's parameters, those parameters are usually transparent and time-locked, and withdrawal works as it does in any lending market, subject to available liquidity. For an allocator seeking steady, organic yield with constrained counterparty risk, the single-protocol earn vault is the lowest-friction entry into DeFi lending.
That low friction is also why the earn vault has become the default building block for the more complex products described below. A structure that is simple to evaluate, transparent to read, and predictable to exit is a sound foundation to build on. The same pattern reappears one layer down inside structured products, where an earn vault often sits as the component generating the base return while the wrapper around it handles distribution, denomination, or leverage. Recognising the earn vault inside a more elaborate product is frequently the fastest way to understand what that product actually does.
Multi-Strategy Deployment in Practice
Multi-strategy vaults operate at a higher level of complexity. Instead of allocating within a single protocol, they accept a deposit of one asset and deploy it across multiple strategies, on multiple protocols, and in some cases multiple chains. A vault accepting USDC might run a leverage loop on one lending protocol, provide liquidity on an automated market maker, deploy into a basis trade, and allocate a portion to a restaking position at the same time. The strategist rebalances across these strategies based on yield, risk, and liquidity conditions. The best-known implementation is Veda's Boring Vaults. Concrete, UpShift, and Ipor offer comparable systems.
The contrast with the earn vault is in where the complexity lives. While earn vaults concentrate risk in a set of visible parameters within one protocol, a multi-strategy vault distributes risk across venues, each with its own mechanics, and binds them together through the strategist's allocation decisions. The depositor in the first case is evaluating a configuration. The depositor in the second case is evaluating a manager and the venues that manager has chosen, which is a larger and less legible task. The added scope buys diversification and reach, and it costs transparency, because no single parameter set captures what the vault is doing.
A significant pattern within this category is the theme vault, built around a specific ecosystem or asset:
EtherFi runs a vault deploying into restaking strategies across the Ethereum ecosystem.
Lombard runs a vault for generating yield on LBTC, a form of Bitcoin used in DeFi.
Berachain and Plume both used multi-strategy vault infrastructure to attract pre-deposit capital before their ecosystems fully launched.
These vaults serve two purposes at once. They give depositors access to a strategy, and they drive liquidity and total value locked to the ecosystem they support. The dual purpose is part of why they have spread so quickly: a new ecosystem can use a vault both to attract capital and to put that capital to work.
The theme vault also illustrates how distribution and strategy have merged. The same structure that gives a depositor exposure to an ecosystem is the structure the ecosystem uses to raise and deploy capital. A depositor in such a vault is therefore taking two exposures at once: the strategy the vault runs, and the trajectory of the ecosystem the vault was built to support. Reading the vault correctly means separating those two things, because they can move independently, and a depositor who conflates them may misjudge what they actually hold.
The trade-offs relative to earn vaults are real and observable. Multi-strategy vaults provide exposure to diverse assets and protocols, which requires more diligence on each strategy's leverage, liquidity, and exit logic. Withdrawals often carry cooldown periods, because large redemptions may require unwinding positions that take time to exit cleanly. The accounting on yields from different venues is complex. If a large depositor exits suddenly, the vault may be forced to unwind strategies at a disadvantageous moment, which can affect the depositors who remain. The flexibility that makes these vaults powerful is the same flexibility that makes them harder to evaluate.
Products Built on Vault Infrastructure
As the infrastructure matured, it became the foundation for a growing set of higher-order products. Three in particular stand out.
What these products share is that the vault has become a component rather than the end product. The depositor in many cases never interacts with the vault directly, and may not know one is involved. The vault sits inside a wrapper that presents a familiar surface: a dollar-denominated token, an exchange balance, or a borrowing position against a tokenized asset. This is the maturation of the infrastructure, and it is also where understanding the underlying exposure becomes hardest, because each wrapper adds another step of distance between the user and the mechanics generating the return.
Yield-Backed Synthetic Dollars
Several protocols issue a token that accrues value from underlying vault strategies, sometimes including basis trades similar to Ethena's approach. The token starts near one dollar and appreciates as yield comes in. These tokens are not pegged to the dollar. If the underlying strategies suffer losses, the token can fall below a dollar. The multi-strategy vault is the engine underneath the product, and the risks of the vault pass directly to the token holder. A holder who treats the token as a stable dollar without examining the engine is mispricing the risk.
Exchange Earn Programs
Exchanges increasingly partner with vault operators to offer onchain yield to their users. The user deposits through the exchange's familiar interface, and behind the scenes the capital flows into curated vaults designed by institutional strategy teams. Sentora's FBTC vaults, built in partnership with centralised exchange earn programs, are one example of this model. It gives users who are not comfortable interacting with DeFi directly a route to institutional-grade strategies through an intermediary they already use and trust.
Tokenized Equity Yield Strategies
A newer pattern uses tokenized real-world assets as collateral within vault structures. In partnership with Chainlink, Euler, and Ondo, Sentora has designed a product that lets users deposit tokenized equities, such as Tesla, SPY, or QQQ representations, into non-custodial vaults on lending protocols like Euler, borrow stablecoins against them, and deploy those stablecoins into yield strategies. The user keeps exposure to the equity position while generating additional returns on the borrowed capital. This is one of the clearest points where traditional-finance assets meet DeFi vault infrastructure.
The Lesson Application Teaches
Across all three layers, the same structure does very different work depending on how it is configured. Two earn vaults holding the same asset can carry different exposure. A multi-strategy vault can be conservative or aggressively leveraged. A synthetic dollar inherits whatever its underlying vault runs. The infrastructure is neutral, and the configuration set by the curator or strategist is what produces the outcome.
For anyone evaluating one of these products, the practical lesson is to look through the wrapper to the vault beneath it, identify the strategy and the collateral, and judge the manager who chose them. The same neutrality that lets these products generate steady yield in calm conditions is what allows a poorly configured one to fail under stress. The product is only ever as sound as the vault inside it and the decisions of the person running that vault.
About this article: This article is based on the data and analysis in Sentora's research report, The Vault Economy: Architecture, Risk, and the Rise of Professional Curation in DeFi. Read the full report for the complete figures, sources, and detail.
