Tokenized Vaults have a lack of standardization leading to diverse implementation details. Various examples include lending markets, aggregators, and intrinsically interest bearing tokens. This makes integration difficult at the aggregator or plugin layer for protocols which need to conform to many standards, and forces each protocol to implement their own adapters which are error prone and waste development resources.

A standard for tokenized Vaults will lower the integration effort for yield-bearing vaults, while creating more consistent and robust implementation patterns, this would reduce development time and possible errors and vulnerable.

All EIP 4626 vault must implement EIP 20 token for representation of its shares. In cases when vaults are not transferable the transfer and transferFrom functions would revert when called. But other EIP 20 token functions would still run when called. Vault share represents a claim of ownership of the underlying asset owned by that vault.

In the resources below, this EIP standard and the code is well explained

The Code The EIP standard Fully Explained The EIP blog from ethereum.org