ERC-4626 is a standard protocol for tokenized vaults. It is an extension of the ERC-20 token standard and provides a standard API for tokenized yield-bearing vaults that represent shares of a single underlying ERC-20 token. Vaults are smart contracts that accept token deposits and provide token rewards to the depositor. Standardizing vault implementations with ERC-4626 makes it easier for applications, plugins, and tools to integrate with vaults.
ERC-4626 provides a foundation for lending markets, aggregators, and intrinsically interest-bearing tokens to be interoperable across DeFi. ERC-4626 is fully backward compatible with the EIP-20 standard and has no known compatibility issues with other standards.