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  1. Home
  2. /Glossary
  3. /Auto-Compounding
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defi

Auto-Compounding

Automatically reinvesting earned yield back into a position to earn compound interest without manual action.

Definition

Automatically reinvesting earned yield back into a position to earn compound interest without manual action. Auto-compounding vaults handle the claim-and-reinvest cycle for you, usually more gas-efficiently than doing it yourself. Beefy Finance and Yearn are popular auto-compounding platforms.

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Related Terms

Yield Aggregator

A DeFi protocol that automatically moves your funds between different yield opportunities to maximize returns.

Compound Interest

Interest calculated on both the initial principal and accumulated interest from previous periods.

Vault

A smart contract that automates a yield-generating strategy by depositing and managing funds on behalf of users.

1inch

A DEX aggregator that splits trades across multiple decentralized exchanges to find the best overall price.

Aave

One of the biggest lending and borrowing protocols in DeFi.

Across Protocol

A cross-chain bridge that uses an optimistic verification system and a network of relayers to move tokens between chains quickly.

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