Cycle vaults take deposited funds and stake them in a 3rd party reward program. The rewards earned from this program can be reinvestedat any time. This simply involves:
Swapping the rewards for the necessary tokens that make up the deposit token, usually an LP token
ex. PNG rewards from the AVAX/PNG vault will be swapped to half PNG and half WAVAX
Providing those tokens as liquidity to receive that LP deposit token
Adding the received LP tokens back into the principle vault fund
This outlines an example of a compounding strategy. Every time rewards are reinvested, the principle fund grows and vault share holders increase their LP position.
To keep this process moving, a small call fee will be sent as WAVAX to the caller of the reinvest operation. This is a small, adjustable percentage of the rewards earned. See more details on the Reinvest page.