Crypto glossary
Yield aggregator
A yield aggregator is a DeFi protocol that pools user deposits and moves them automatically between strategies to chase the best available return.
A yield aggregator collects deposits into vaults, each running a strategy coded in smart contracts. The strategy might lend assets, provide liquidity or stake them, then harvest the rewards, sell them and reinvest the proceeds. Users receive a vault token that represents their share and grows in value as returns compound.
Yearn Finance made the model popular, and similar vaults now exist on most major chains. Aggregators save users the gas costs and constant attention needed to rotate between protocols by hand, because one transaction from the vault serves thousands of depositors at once. Most charge a management fee, a performance fee, or both.
Each strategy stacks the risks of every protocol it touches, so a bug or exploit anywhere in the chain can hit the vault. Advertised APYs are usually variable and can fall quickly as more money arrives or reward tokens drop in price.
Example
A user deposits 10,000 USDC in a stablecoin vault; the aggregator splits it between two lending markets, compounds the interest daily and shows a hypothetical 6% variable APY after fees.
