# Penalties ## The Overdraw Penalty #### Before Break-even Every time you withdraw available rewards, you will incur a 10% reduction of the daily reward rate. This reduction is easily reversed by compounding, so it will not affect investors employing a 6:1 or 3:1 strategy. Withdrawing nine times in a row will drop your rewards by 90%, resulting in the lowest possible rate. You would then have to compound nine times to offset this reduction and restore the original rate. #### After Break-even Once you've earned your initial investment back, compounding available rewards will no longer reverse the 10% rate reduction that is incurred on every withdrawal. Withdrawing your available rewards will thus result in a semi-permanent reduction of your rewards rate. You can counteract this reduction by investing more money into the pool. When the total amount you've invested is more than the total amount withdrawn, you will be able to reverse the reward rate reduction by compounding, thereby restoring the original rate. ## The Hoarding Penalty For every day that passes without action, you'll incur a 10% reduction of the daily reward rate. This reduction is automatically reversed any time that you invest, compound or withdraw. The hoarding penalty is designed to protect investors from would-be competitors who're trying (unsuccessfully) to circumvent the overdraw penalty by using a hoarding strategy. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://dappy.gitbook.io/docs/using-dappy/penalties.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.