Ethereum (ETH) developer and co-founder of the Stack3 DAO platform, known on social media under the pseudonym 0xSassun, spoke on Twitter about the benefits of an unusual proposal for the leading altcoin Ethereum, presented last month.

   "ERC-4626 will be a huge game changer and 99% of #DeFi folks are sleeping on it. In short ERC-4626 is a Tokenized Vault Standard."

With the proposed new standard, a single Ethereum ERC-20 token will behave similarly to the vault system. The vault system is the foundation of the global decentralized finance (DeFi) ecosystem.

With Ethereum (ETH) Proposal EIP-4626, Tokens Will Turn into Vaults

To explain briefly, with the new proposal, a new standard for ETH-based tokens, ERC-4626, can be used. These tokens will be able to replace vaults, which are yield-bearing mechanisms in the DeFi ecosystem.

erc4626

Today, yield-bearing tokens periodically offer rewards to their users in proportion to the growth of their liquidity pools.

However, in the current situation, yield-bearing token development is considered a difficult process in the DeFi world. Engineers have to write a lot of hack-resistant 'adapter' code to ensure the integrity of their systems. If the EIP-4626 proposal is approved, such mechanisms will be simpler to use, according to the Ethereum (ETH) developer.

Ethereum (ETH) Developers Support This Different Proposal

According to 0xSassun's statement, with the arrival of the ERC-4626 standard, the interoperability of different DeFi protocols will increase and developers will have to deal with less.

In addition, with this update, the security and auditability of smart contracts will increase. This is thought to be the main reason for former Ethereum (ETH) developers to support this proposal. The update is expected to have a positive impact on the Ethereum (ETH) price.