Auto-Defragmentation
Auto-defragmentation is a Pond Module that automatically consolidates fragmented UTXOs in your Smart Account, keeping your account clean and efficient without any manual intervention.
The Problem
On UTXO-based ledgers like Cardano, every transaction creates new outputs. Over time, an account accumulates many small UTXOs — a condition known as UTXO fragmentation. This causes real problems:
- Higher fees — transactions with more inputs cost more to execute.
- Increased memory usage — smart contracts consume more resources when processing fragmented inputs.
- Failed transactions — dApp interactions can fail entirely when execution budgets are exceeded due to too many inputs.
Traditionally, users must manually consolidate their UTXOs to work around these issues — a tedious and error-prone process.
How It Works
When your Smart Account opts into auto-defragmentation, the module automatically consolidates your token balances in a decentralized manner whenever needed. There is no action required on your part — fragmentation is resolved as it occurs.
A flat fee of 1 ADA is deducted per defragmentation to cover network costs and a small service incentive. For non-ADA token consolidation, the fee is withdrawn from the minUTxO ADA amount instead.
Why It Matters
UTXO fragmentation is one of the most common sources of friction on Cardano. Auto-defragmentation removes this entirely — you get a cleaner account, lower transaction costs, and fewer failed transactions, all at a negligible extra cost.