Auto Rebalancing
The engine that keeps each portfolio at its target weights, automatically.
Each portfolio is designed to keep a target allocation across its tokens (for example: a Blue Chip strategy with $BONK - 22%, $JLP - 20%, $JUP - 20%, $JITO -20% and $PYTH - 18%). Over time, token prices move, and these weights drift.
To preserve the portfolio’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 rebalancing engine operates on a delta basis. Using the vault’s swap function, it executes only the minimal set of trades required to restore the target allocation, selling overweight assets and reallocating into underweight ones.
To maximize capital efficiency and reduce the frequency of rebalancing events, each deposit is allocated to assets that are furthest from their target weights, bringing the portfolio as close as possible to the intended allocation.
Execution
Rebalance swaps are executed atomically through Jupiter aggregator.
Outcome
Vault composition is restored to its target weights.
dToken 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 portfolios and strategies 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.
Rebalancing is executed autonomously by the protocol. dToken holders do not initiate or control individual swap transactions.
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