Technical Definition
Yield Aggregator
A protocol that automatically moves deposits between yield sources and reinvests rewards on your behalf.
By Crypto University Editorial
Yield Farming · APY (Annual Percentage Yield) · APR (Annual Percentage Rate) · Total Value Locked (TVL) · Exploit
✦ Key Insight
Aggregators concentrate risk. A flaw in the vault strategy affects every depositor at once, regardless of which underlying protocols were sound.
✕ Common Misconceptions
Comparing a vault's compounded APY against an uncompounded APR elsewhere. Also failing to read what the strategy actually does — some use leverage that liquidates in a sharp move.
Detailed Explanation
You deposit into a vault, and the strategy handles claiming, selling and recompounding rewards, plus rotating between opportunities. It saves gas and effort compared with doing this manually, and it means your funds pass through additional contracts you did not individually assess.
In Practice
“A depositor uses a vault rather than compounding manually, saving repeated gas costs, and accepts the vault contract as an additional layer of risk on top of the underlying protocol.”