XAI staking rewards automatically compound following each staking distribution made to the on-chain vault.

This means the amount of XAI that can be redeemed for svXAI will increase as more 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 the svXAI portion, 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 portion of 50% would now be worth 100 XAI.

If somebody new wants to own a portion equal to 50% 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 a 50% portion for 100 XAI ignoring the rewards deposited. But your rewards were factored into the calculation without you doing anything.