A vault is a sort of blockchain architecture that is used for storing, depositing, and withdrawing various types of cryptocurrency assets, particularly in decentralized finance (DeFi) protocols.
A DeFi system, for example, must automatically exchange the proper quantity of assets between multiple parties using smart contracts when a user stakes, loans, borrows, or mints distinct crypto assets.
During times of heavy purchase or sell pressure, a vault mechanism may be utilized to maintain a 1:1 stablecoin peg with fiat currencies by adding and deleting various cryptocurrencies (typically baskets of currencies) and stablecoins.
