How to write an ERC-4626 token contract for yield-bearing vaults

In April 2022, Yearn Finance, a prominent decentralized finance (DeFi) protocol, announced its support for the Ethereum Request for Comment (ERC)-4626 token standard, highlighting its inevitability in conjunction with Yearn V3 vaults. ERCs, or Ethereum Request for Comments, are essential standards in the Ethereum ecosystem that ensure consistent construction of applications and smart contracts. ERC-4626, also known as the "tokenized vault standard," extends the ERC-20 standard by introducing functionality for yield-bearing vaults, allowing users to profit more than their initial deposits based on the vault's generated profits. Yield-bearing vaults are smart contracts that pool ERC-20 tokens, distribute them across profitable protocols, and then convert profits back to the initially deposited tokens. ERC-4626 simplifies the implementation of yield vaults by providing a unified API for interoperability across protocols. This standard, proposed as an Ethereum Improvement Proposal by Joey Santoro and others in December 2021, addresses the lack of standardization for yield-bearing tokens in DeFi, enabling developers to build more efficient and interoperable financial products.