DeFi primer (only what you need for Concrete)

Level: Beginner · Read time: 10 min

If a word here is new, keep it in mind; the glossary has every term used across the docs.

Wallets, keys and gas

A wallet (MetaMask, Fireblocks, a Safe, etc.) holds your keys. Whoever has the seed phrase / private key controls the funds. No legitimate Concrete page or tool ever asks for a seed phrase.
Every on-chain action costs gas, paid in the chain's native token (ETH on Ethereum). Keep some ETH for fees even if you deposit USDT.
Approval: the first time you deposit a token, you sign a transaction letting the vault contract move that token. Deposit is a second transaction.

Tokens

Term	Meaning
ERC-20	The standard for fungible tokens on Ethereum.
Stablecoin	Token pegged to a currency, e.g. USDT, USDC, USD1, frxUSD.
WBTC / LBTC	Bitcoin-backed ERC-20 tokens (WBTC is custodied off-chain 1:1 by BTC).
weETH	A liquid-restaking ETH token (a Concrete vault for it exists but is permissioned).
RWA	Real-world asset (e.g. treasuries) represented on-chain.

What is a "vault"?

A vault is a smart contract that pools deposits, deploys them into strategies, and tracks who owns what using shares. Think of a mutual fund where the share price rises as the fund earns.

ERC-4626 in 60 seconds

ERC-4626 is the Ethereum standard for tokenized yield vaults. It defines a common interface:

Function	Meaning
`deposit(assets)` / `mint(shares)`	Put in assets, get shares.
`withdraw(assets)` / `redeem(shares)`	Burn shares, get assets.
`totalAssets()`	Everything the vault currently controls.
`convertToShares` / `convertToAssets`	Price conversions.
`previewDeposit` / `previewRedeem` …	"What would I get?" helpers.

Because Concrete follows the standard, wallets, dashboards and other protocols can integrate any Concrete vault without custom code.

Yield vocabulary

APR - simple annual rate (no compounding).
APY - annual rate with compounding. 8% APR compounded daily ≈ 8.33% APY (see examples/python/yield_calculator.py).
TVL - total value locked.
AUM - assets under management (used for management fees).
NAV - net asset value; the vault's holdings minus liabilities, from which share price is derived.

Where does yield come from?

Concrete itself does not prescribe a yield source. Each vault has a curator who chooses strategies, such as lending markets (e.g. Morpho-style), leveraged "looping", liquidity provision, restaking, or custodied off-chain positions. Different vaults therefore carry very different risks. A stablecoin lending vault and a leveraged BTC vault are not the same product.

Custody and control terms

Multisig - a wallet that needs several signers to approve a transaction (e.g. Gnosis Safe).
MPC - multi-party computation; signing is split so no one party holds the full key (e.g. Fordefi).
Qualified custody (QC) - assets held by a regulated custodian on a client's behalf.

Risk vocabulary

Smart-contract risk - bugs, even after audits.
Strategy / counterparty risk - the protocols or custodians the vault relies on.
Impermanent loss (IL) - LP positions can underperform simply holding when prices diverge.
Slippage - executing a swap at a worse price than expected.
Liquidity / withdrawal risk - you may have to wait in a queue to exit.

Next: 03 · Getting started.