Rebalancing
Rebalance is executed only when both conditions are met:
ΔAPR* ≥ 5% (portfolio performance improvement is significant)
Δy_day × 10 ≥ IL_reb (new yield can recover realized IL within 10 days)
Yield Gap Condition (ΔAPR*)
Prime AI evaluates whether the current portfolio allocation is still optimal by comparing Current APR* with a Simulated APR* under a reallocation scenario.
Definitions:
Current APR* = Performance of the existing portfolio (yielding assets + idle assets under current allocation).
Simulated APR* = Performance Prime AI projects if all assets were unlocked and reallocated into the optimal set of strategies right now.
ΔAPR* = Simulated APR* - Current APR*
IL Coverage Condition (Δy_day)
Rebalancing may require unwinding existing LP positions, which realizes impermanent loss (IL).
Prime AI simulates whether the incremental yield from rebalancing can cover the realized IL within 10 days.
Definitions:
IL_reb = realized IL cost from exiting/entering new pools.
y_new_day = expected daily net yield after rebalancing.
y_cur_day = expected daily net yield if current position is maintained.
Δy_day = y_new_day – y_cur_day
Δy_day * 10 >= IL_reb
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