What is UTXO consolidation?

Consolidation combines several UTXOsUTXOAn unspent transaction output: an amount of bitcoin left by a transaction, with rules for spending it. in a transaction back to your own wallet. The new outputs total less than the inputs because of the fee.

Having fewer outputs can reduce the inputs needed in a later payment. Whether this saves money depends on the fees now, the fees later and what you actually spend. Combining outputs also publicly links their histories, so it has a privacy cost.