A vault is a smart contract strategy that uses an algorithm that is programmed to automatically take the multi-step process of auto-compounding your assets. To give you an idea of how they work, traditionally users add LP tokens to yield farms, and are rewarded with a reward token.
Compound on the single assets will harvest the pending rewards, sell only the amount required based on the fee structure, and redeposit the majority of the harvest.
Bikini vaults reward users with auto-compounded rewards that are much higher than the non-compounded rewards offered by yield farms themselves. This saves users time, gas fees, and protects their gains.