# Vaults

Wasabi vaults use the [ERC-4626](https://ethereum.org/en/developers/docs/standards/tokens/erc-4626/) tokenized vault standard. ERC-4626 is a standard that optimizes and unifies the technical parameters of yield-bearing vaults. 

To deposit into Wasabi LP Pools, the LP deposits tokens into the vault to buy vault shares. Deposited tokens are used to provide liquidatable loans to traders. Once a position is closed or liquidated, the vault collects the interest, increasing the price per vault share. A loss will be recorded in the unlikely event of a late liquidation, decreasing the share price.

By selling their shares back to the pool, LPs can claim the interest earned and the original deposit amount.

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