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 small flat fee of 0.5 ADA is deducted per defragmented UTxO to cover transaction fees and operator costs. For non-ADA token defragmentation, tokens are returned in full — the fee is paid from the excess minUTxO ADA released when fragmented inputs are merged.
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.