Before diving deep into Tokenized vaults, developers can create new ERC standards that define a required set of functions for a token type – and they did just that. Two recently created ones have each attracted some attention and may find adoption in the future.

Crypto users are probably familiar with numerous ERC standards, the most common of which is ERC-20, a standard for creating fungible tokens that are compatible with the broader Ethereum (ETH) network.

Also, other popular standards include ERC-721, a standard for creating non-fungible tokens (NFTs), and ERC-1155, a standard that supports the creation of both fungible and non-fungible tokens.

Developers recently created two more standards that grabbed some attention from the community, these being ERC-4626 and ERC-721R.

ERC-4626: designed to standardize tokenized Vaults

Crypto vaults are contracts into which users deposit tokens and earn yield in return. Therefore, many of such vaults are tokenized. Clearly, Aave mints aTokens, Compound (COMP) mints cTokens, and Sushi mints xTokens for the funds deposited in the protocols.