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How it works

When you deposit into an Earn Vault, you receive vault shares at the current share price. Your number of shares stays the same after deposit, but the value of each share can increase over time as the vault earns yield. When you withdraw, your shares are redeemed back into the deposit token at the current share price. In simple terms:
  1. You deposit one token into a vault.
  2. You receive vault shares.
  3. The vault allocates capital across Kamino lending reserves.
  4. Interest earned by the vault increases the value of each share over time.
  5. When you withdraw, your shares are redeemed for the deposit token at the latest share price.
Yield is not usually paid out as separate tokens. Instead, it is reflected in the increasing value of your vault shares over time through auto-compounding.

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Your position is represented by vault shares

After depositing, you hold vault shares rather than simply seeing your original token balance remain unchanged. Your share count does not go up as yield accrues. Instead, each share becomes worth more over time.

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The vault manager controls allocations

Each vault is managed according to target allocations set by a curator. Depositors do not choose the individual reserves their funds are deployed into. This means you are relying on the vault’s managed allocation rather than making those lending decisions yourself.

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Withdrawals depend on available liquidity

Vaults keep a liquid buffer for withdrawals, but larger withdrawals may require capital to be recalled from the underlying reserves. In normal conditions this is usually smooth, but in high-utilization conditions withdrawals may be delayed until liquidity becomes available.