VaultTokens

When a liquidity provider deposits capital into a PublicVault , they are minted ERC-4626 VaultTokens that represent their share in the vault. These yield-bearing assets accrue in value as loans are repaid in interest. VaultTokens are priced according to the implied value of the PublicVaults, which tracks the value as if borrowers instantly repaid principal on loan origination and linearly repaid interest for the duration of the loan. However, payments ahead of schedule (decreasing total interest), as well as liquidations, may discount the implied value of the PublicVaults and decrease the value of each VaultToken.