Terminology

Learn about Lagoon's technical terms

ERC-7540

This is the smart contract standard using by Lagoon vaults. ERC-7540 introduces asynchronous deposits and withdrawals. It is used for shares tokenization and extends its predecessor capacities known as ERC-4626.

Multisig Wallet

An 'Externally Owned Account' (EOA) is controlled by a single private key. While a multisig wallet is built on top of a smart contract and requires several 'EOA' acting as signers for each transaction.

A multisig wallet emphasizes security and programmability. This solution is suitable when multiple parties need to coordinate toward a common goal or manage large amounts of assets.

In this field, Safe is the most prominent and battle-tested multisig wallet provider.

Price Oracle

The price oracle is responsible for computing data and updating the vault net value upon operator request. To do so, debts are deducted from total assets balance.

Price per share is obtained by dividing the vault net value from outstanding shares.

Shares

Shares represents a claim on assets deposited within the vault.

They are distributed in exchange of a given underlying token, at a price determined by the oracle, during a settlement period.

While the price per share reflects a given vault's performance and its evolution over time denominated in a specific underlying token.

In short, Shares entitles the user to fees generated by the operator (minus hypothetical commissions).

Underlying token

The underlying token refers to the asset in which the manager's gains and losses are denominated.

It is the asset deposited and received by the user.

Vault Settlement

Settlement describe the action by which a vault operator validate deposit and / or withdrawal requests. After, the user(s) can swap all or part of its shares for its underlying tokens, on a pro-rata basis to its stake within the vault.

Vaults

Vaults are investment vehicles relying on assets, protocols and instruments to set up a wide range of strategies. The weight breakdown, its evolution, along with other factors — depends on the operator's choice.

Simply put, it's a way of simplifying the on-chain experience both for skilled operators and DeFi enthusiasts.