The new Ethereum token standard EIP-4626 may allow the creation of yield tokens. With this standard, one Ethereum ERC-20 token will act similarly to repositories, which are key elements of the global ecosystem of decentralized finance (DeFi). So what is EIP-4626?
Turning Tokens into Repositories: Meet EIP-4626
Ethereum (ETH) developer and expert, co-founder of the Stack3 DAO platform and known on Twitter as 0xSassun, shared the benefits of the most unusual offer for the leading Ethereum (ETH) altcoin last month.
1/5 What are Vaults?:
Vaults are smart contracts that are developed to accrue yield that you can earn by locking your tokens.
Vaults have a designated strategy with the aim to generate a return through capital investments, auto compounding, and portfolio rebalancing.
— 0xSassun (@0xSassun) May 6, 2022
In short, this proposal will introduce a new Ethereum-based token standard, ERC-4626. These tokens will be able to replace the storage facilities that ensure the effectiveness of mechanisms for the DeFi segment. Modern profitability tokens guarantee their users periodic rewards that correlate with the growth of their underlying liquidity pools.
However, it is currently quite difficult to create DeFi on top of revenue-generating tokens. To ensure their integrity, engineers need to write several hacking-resistant “adapters”. Software developers also state that such mechanisms will be developed in the “Lego” style if EIP-4626 is approved.
Ethereum (ETH) Veterans Support Eccentric Bid
As 0xSassun describes, the implementation of ERC-4626 will increase the compatibility of various DeFi protocols and reduce complexity and development efforts. In addition, this update will provide security and the ability to audit smart contracts. Therefore, experienced Ethereum (ETH) developers support the upcoming innovation. Namely, Joey Santoro from Fei Protocol (FEI), Yearn.Finance Protocol (YFI) and Paradigm venture capital heavyweights supported the representatives.
While these events are taking place, the leading altcoin continues to lose market positions, as you can find out from the Somagnews news. At the time of writing, according to CoinMarketCap, Ethereum has lost 4.48% in value over the past 24 hours, falling to $2,559. Altcoin, which follows Bitcoin in the crypto league, is 47.74% behind the historical high of about $4,900, which it observed about 6 months ago. Let’s see if new developments can solve the Ethereum problem.
