🛳️Auto-Rebalancing Engine
Smart Liquidity Movement, Without Manual Intervention
CrediX's Auto-Rebalancing Engine is the logic layer responsible for continuously optimizing user positions by reallocating assets across integrated lending/borrowing protocols. It enables both yield maximization and cost minimization, with minimal friction or user input.
Why Rebalancing Matters
DeFi markets are dynamic — rates fluctuate block by block, and optimal positions can change in minutes. Without rebalancing, funds may sit in suboptimal protocols, leading to:
Lower APY for lenders
Higher APR for borrowers
Reduced collateral efficiency
Auto-rebalancing solves this by actively monitoring protocol metrics and reacting to market changes in real time or near-real time.
Key Rebalancing Objectives
Maximize Return on Idle Deposits
Minimize Borrowing Cost Over Time
Reduce Risk Exposure (e.g., over-utilization)
Ensure Protocol Diversification (if configured)
How It Works
The Auto-Rebalancing Engine operates as a background service triggered by either on-chain activity or scheduled checks.
Step-by-Step Flow
Monitor Rates: The Rate Oracle continuously tracks lending APYs and borrowing APRs across all connected protocols.
Compare Thresholds: A configurable threshold (e.g., 0.30% yield difference) determines when a rebalancing action is justified.
Calculate Net Benefit: The engine estimates gas costs, slippage (if any), and timing to ensure rebalancing is profitable.
Execute Reallocation: Funds are withdrawn from the underperforming adapter and re-deposited into a better-performing protocol.
Emit Rebalance Event: The system logs the rebalancing activity for transparency and historical auditing.
Rebalancing Triggers
Time-based
Rebalances every X hours (e.g., 6h, 12h)
Rate-based
Triggers if a better APY/APR exceeds threshold
Manual override
Admins or users with permissions can force it
Risk-based
Activated if protocol utilization crosses safe thresholds
Example: Lending Rebalance
A user’s USDC is earning 3.5% in Compound. The Rate Oracle flags that Morpho now offers 4.3%. Gas costs are low and the rate difference is above the configured threshold.
The Auto-Rebalancing Engine withdraws the USDC from Compound and deposits it into Morpho — increasing the user’s returns with no action needed on their part.
Rebalancing Policy Parameters
These can be configured per asset, per user segment, or globally:
Minimum Rate Difference: e.g., 0.25%
Cooldown Period: e.g., no rebalancing within 3 hours of last action
Max Gas Fee Cap: rebalancing won’t execute if gas exceeds preset amount
Rate Volatility Filter: smooths out temporary spikes
Gas Efficiency Measures
To avoid unnecessary gas costs:
Rebalancing is batched when possible
Gas-efficient adapters reduce interaction overhead
Simulation layer ensures profitable execution before action
Users can opt in/out of auto-rebalancing for individual positions
Smart Contract Integration
Rebalancing logic is built into the StrategyManager contract and can interact with:
Vaultfor asset movementProtocolAdaptercontractsRateOraclefor input ratesAutomationTrigger(e.g., Gelato or Chainlink Keepers)
Transparency & Auditing
All rebalancing actions:
Emit on-chain events
Include before/after rate snapshots
Are visible on the user dashboard
Can be exported via CSV or API
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