Auto Rebalancing
Each index is designed to keep a target allocation across its tokens (e.g. : Blue Chip index with $BONK - 22%, $JLP - 20%, $JUP - 20%, $JITO -20% and $PYTH - 18%). Over time, token prices move, and these weights drift.
To preserve the index’s structure, an auto-rebalancing engine monitors the vault continuously.
How it works:
Drift Monitoring
The engine checks (uses Switchboard oracle every 1 min) if the weight of any token deviates more than the threshold defined by the vault manager or the admin (e.g. 10%) from its target allocation.
Example: If $BONK should be 22% but grows to 32%, it’s flagged for rebalancing.
Triggering Rebalance
When drift exceeds the threshold, a rebalance is triggered.
The engine uses the swap function of the vault to swap everything back in $USDC and then swap back to the tokens of the index, respecting the initial repartion. This equals to selling out-performers to buy back under-performers.
Execution
Rebalance swaps are executed atomically through Jupiter aggregator.
To ensure index integrity, avoid slippage or failed transactions, swaps are bundled and routed efficiently.
Outcome
Vault composition is restored to its target weights.
Index token price (NAV) remains continuous, as TVL is preserved (minus minor trading fees/slippage).
Users don’t need to take any action - it’s fully automatic.
Why it matters:
Keeps indexes true to their narrative (you always get the intended exposure).
Protects against over-concentration in a single asset.
Makes the product truly “set and forget” for users.
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