Moodle offers a wide range of system-related performance settings that are set at various places in the Site administration menu.
Caching stores frequently accessed data in a temporary storage, and expedites its access using the cached copy as opposed to re-fetched (from disk) or re-computed (in memory) data. It has proven to be one of the most efficient performance optimization techniques and Moodle is no exception.
Moodle has some basic built-in caching and manages memory allocation and compression automatically. Additionally, you might consider installing a caching system such as eAccelerator, APC or memcached. Please refer to the respective documentation on how to set these up.
The principal trade-off in caching ...