A rotary encoder module, like the KY-040, is a type of rotary input device that converts the angular position of a shaft or dial into digital or analog signals. It consists of a rotary shaft with a series of evenly spaced contacts, and a stationary circuit board with contacts that correspond to the shaft contacts. As the shaft is turned, the circuit board contacts make and break connections with the shaft contacts, generating a series of pulses. These pulses can be counted and used to determine the angular position of the shaft. Rotary encoder modules are commonly used in DIY electronics projects and can be used in a wide range of applications, including dials, potentiometers, and control knobs. They are useful for providing precise, continuous control in electronic circuits.

Add a volume control knob or speed control by using a rotary encoder. You only need one pin from your Ardunio to read the rotation value.

A great tutorial is available at https://howtomechatronics.com/tutorials/arduino/rotary-encoder-works-use-arduino/