XAI staking rewards automatically compound and the value of your svXAI balance will increase following each staking distribution made to the on-chain vault.

Your svXAI balance will increase in value to be worth more XAI as staking rewards are paid into the vault. Future stakers will need to add more XAI to receive the same amount of svXAI compared to before because it is more valuable. The compounding is in the value of svXAI increasing daily as staking distributions are made into the on-chain vault.

Example:

There is 100 XAI in the vault and you hold 50% of svXAI shares, which means you can claim 50 XAI. If 100 XAI of staking rewards was deposited to the vault there would be 200 XAI in the vault and your 50% of shares would now be worth 100 XAI.

If somebody new wants to own 50% of shares they need to deposit an amount of XAI that equals 50% of XAI in the vault. The vault now has 200 XAI so they need to deposit an additional 200 XAI to make a total 400 XAI in the vault. As they have deposited 200 of the 400 XAI in the vault they would mint shares equal to 50% of the vault.

This means your rewards have auto-staked. If they hadn't then the new entrant would have been able to mint 50% of shares for 100 XAI ignoring the rewards deposited. But your rewards were factored into the calculation without you doing anything.