Convert space next to vault (7)
I believe the answer is:
encrypt
'convert' is the definition.
(I know that encrypt is a more specific form of the action encode)
'space next to vault' is the wordplay.
'space' becomes 'en' (in printing, a space as wide as a letter 'n').
'next to' says to put letters next to each other.
'vault' becomes 'crypt' (I've seen this in another clue).
'en'+'crypt'='ENCRYPT'
(Other definitions for encrypt that I've seen before include "Cipher" , "Obscure significance" , "Encipher" , "Convert words into code" , "Put (a message) into code" .)