# Terminology

## Vaults

**Vaults are smart contracts responsible for tokenizing the ownership of a strategy in exchange of an underlying asset.** Vaults manage deposits, withdrawals, and accounting for the underlying asset.

## ERC-7540

ERC-7540 vaults introduce **asynchronous deposits and withdrawals**, allowing vault entry and exit to be processed in a 2 steps fashion, one for the request and one for the claim. It is also used for share tokenization in ERC20. Lagoon vaults are based on this standard.

## 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.

{% hint style="success" %}
In this field, [Safe](https://app.safe.global/) is the most prominent and battle-tested multisig wallet provider.
{% endhint %}

## Valuation Provider

The vault is expecting to receive updates of the total value in the strategy in order to settle requests. The valuation provider is responsible for computing this value and propose it. For this value to be enforced in the vault and used to settle requests the curator address has to approve it.

## Underlying token

The **underlying token** refers to the asset in which users will deposit and withdraw.

The valuation provider will propose the new total asset in this unit of account.

## 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 valuation Provider, at settlement.

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

## **Vault** Settlement

**Settlement** describe the action by which a curator validate the previous valuation Provider proposal. A settlement will honor all deposits requests. Withdrawal requests will be honored if the curation address has enough assets available.


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.lagoon.finance/overview/terminology.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.