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STRATEGIES

Auto-compounding (Automatic Compounding)

Definition

Auto-compounding automatically reinvests earned rewards back into the original investment, maximizing returns through compound interest without manual intervention.

Example

💡 Example

A yield vault auto-compounds by automatically selling earned tokens and buying more of the deposit token to increase your position.

Risks to Consider

⚠️ Risks
  • Gas costs eating returns
  • Price impact
  • Strategy changes

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