> For the complete documentation index, see [llms.txt](https://docs.eleven.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.eleven.finance/vaults/benefits-of-compounding.md).

# Benefits of compounding

The majority of our vaults work on a compounding strategy. This sees vault rewards harvested and reinvested into the underlying asset. In the WEX-BNB example used [previously](broken://pages/-MiSMn1kG4Z19NUw3h4V), we staked WEX-BNB wLP's from WaultSwap. When these LP tokens are staked on WaultSwap they earn $WEX rewards. Our Vaults take this $WEX reward, sell it and use the earnings to purchase more BNB and add this to the total number of WEX-BNB wLP's from WaultSwap in the vault.

This compounding happens as the Vault contract is harvested, and more details of how this is called will be outlined further in the documentation. The important thing to note is that with the compounding of rewards into the underlying asset (the WEX-BNB wLP's from WaultSwap) we can see exponential growth. This is reflected as Annual Percentage Yield or APY (more details about APY can be found [here](https://www.investopedia.com/terms/a/apy.asp#:~:text=The%20annual%20percentage%20yield%20\(APY,the%20effect%20of%20compounding%20interest.)).

APR or Annual Percentage Rate on the other hand is the return you would expect, if the compounding outlined above didn't occur. This is linear growth and more details can be found [here](https://www.investopedia.com/terms/a/apr.asp).

![](/files/oaqMLpN6lgxRDW8NEOen)

The vaults of Eleven Finance utilise the power of compounding returns as one of our strategies to provide optimal yields to the users of our platform.


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://docs.eleven.finance/vaults/benefits-of-compounding.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.