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I run a WP3.x Multisite setup. One of the themes I use on a site has options for minifying, using Gzip compression and using data URIs for images (not sure what the latter function is or does). In the past, I have used W3 Total Cache, in combination with Cloudflare.

What is the best practise here - should I defer to the theme's compression settings, or is it prudent to let W3 Total Cache take care of everything?

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I find that W3 Total Cache works well for me in doing minifying and gzipping. (I'm not sure about the others.)

More generally, if there's a plugin that does something, I use the plugin. It's very rare to see a do-it-all theme do something better than a specialized, single-function plugin, particularly when that plugin is of the caliber of W3 Total Cache.

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If the theme's settings works correctly, I'd recommend it, so that you can reduce the number of plugins you have installed. :) But, as you have multisite, you are probably not going to use the same theme everywhere. In that case, you may just rely on W3 Total Cache plugin that does the job well on all the sites. As @mrwweb already mentioned, there are additional options in W3 Total Cache plugin that may not be available with the theme.

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