@edencoffey
When tokens offer liquidity rewards or staking yield, reinvesting compounds exposure but also magnifies risk. Reinvestment makes sense if project fundamentals are strong and rewards significantly exceed opportunity cost. However, keeping a reserve portion allows flexibility to exit quickly if conditions change. A balanced approach often works best—reinvest a percentage of earned yield to maximize compounding while retaining part as liquid backup. This hybrid model protects against downside shocks like rug pulls or reward dilution. Ultimately, reinvestment strategy depends on project trustworthiness, lock-up terms, and personal risk tolerance.
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