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readme: math pending
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utkarshdagoat committed Oct 20, 2024
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# ReBalancer
ReBalancer is a balancer v3 hook that dynamically rebalances lp positions and fees based on real-time events and market implied volatility.

## The Motivation
Volatility spikes are common during key real-world asset (RWA) events like central bank interest rate decisions, inflation reports (e.g., CPI), corporate earnings releases, bond coupon payments, and dividend announcements. Additionally, off-market hours in traditional finance and major geopolitical developments can drive price fluctuations.
RWAs that generate income, when these predictable price changes occur (like a bond's coupon payment), the value lost due to this change is permanent. That’s because the LP has effectively lost part of the asset’s value as it was transferred in the form of a coupon or dividend to the holder.
As the value of RWA tokens is expecteed to cross $16 Trillion by 2030 said by [bcg](https://web-assets.bcg.com/1e/a2/5b5f2b7e42dfad2cb3113a291222/on-chain-asset-tokenization.pdf). Solving such a problem with balancer hooks can attaract LPs that provide such assets.

## The Problem
Arbitrageurs capture all expected price and volatility changes at the expense of LPs. These predictable arbitrages harm liquidity, lead to MEV leaks, and deter swappers due to poor liquidity

## Solution
A hook that dynamically optimizes LP fees and positions by leveraging forward-looking volatility for flexible fee adjustments, redirecting value from arbitrageurs to LPs, and using anticipated price movements to rebalance LP positions in advance.

*ReBalancer* solves the problems by
- Positions itself smartly in case of future events that leads to voltality of these assets.
- Improve LP returns by dynamic rebalancing and fees.
- Minimizes losses to arbitrages

## Implmentation
As *ReBalancer* works on modifying and removing the liquidity it is both a *Hook* + *Router*.

### Architecture/Flow
![Rebalancer flow](images/balance.png)


<details>
<summary><h3>Maths</h3></summary>
</details>
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