Weighting & Rebalancing
Blends are not actively managed. Weights are held by the pool's own math and by third-party arbitrageurs acting in their own interest.
The constant-weighted pool
Each Blend is backed by a weighted pool in which every component is meant to represent a fixed share of total value — for example 40 / 30 / 20 / 10. The pool quotes swap prices from its reserves such that trades which move it back toward those target shares are cheaper, and trades which push it further away are more expensive.
How arbitrage rebalances it
When a component rallies, it becomes overweight inside the Blend and the pool quotes it slightly below the external market price. Arbitrageurs buy the overweight asset out of the pool and sell it elsewhere for a profit, which mechanically restores the target weight. The reverse happens for an underweight component.
- No keeper, admin or scheduled rebalance transaction is required.
- Rebalancing cost is paid by arbitrageurs seeking the spread, not by depositors.
- The pool earns swap fees on every rebalancing trade, which accrue to LPs, the creator, and the buyback.
Extreme price divergence
Arbitrage only works while it is profitable. If one component gaps violently, loses its external market, or becomes too illiquid to hedge, arbitrageurs stop closing the gap and the Blend's effective composition drifts away from the creator's intended weights.
- A collapsing component becomes a shrinking share of the Blend — the Blend keeps holding it, but its impact fades as its value approaches zero.
- A vertical component becomes overweight until arbitrage catches up, temporarily concentrating the Blend.
- Weight caps limit how bad the starting concentration can be, but they do not cap drift after launch.