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Rebalance Process Flow

How the protocol restores collateral ratio by burning ha from stability pools and paying out rebalance tokens to those pools.

Contract SoT: Stability pool manager. Pool behaviour: Stability pools process flow.

CR breach, pool ha, minter redeem, then pool-specific payouts.

Trigger​

Rebalancing is allowed when the minter’s collateral ratio is below the manager’s rebalanceThreshold (view: rebalanceable()).

collateralRatio = collateralValue / peggedValue; // via Minter
if (collateralRatio < rebalanceThreshold) {
    // rebalance() may be called
}

Anyone can call it when eligible; keepers typically do for the bounty.

Process​

1. Call​

stabilityPoolManager.rebalance(bountyReceiver, minPeggedLiquidated);
  • Checks CR is below the rebalance threshold (reverts otherwise).
  • minPeggedLiquidated is a slippage / minimum burn guard (not a “max rebalance” circuit breaker).
  • The explicitly supplied bountyReceiver receives a rebalance bounty cut of the payout tokens (configured rebalanceBountyRatio) — not necessarily msg.sender.

2. Burn ha from pools​

  • Manager pulls ha from the collateral and Sail stability pools (fee-free path via ZERO_FEE_ROLE).
  • ha is redeemed through the minter (freeRedeemPeggedToken) so system pegged supply falls and CR rises.
  • Each pool’s ha balances scale down via the loss product.

3. Pay out rebalance tokens​

PoolPayout token
Collateral stability poolWrapped collateral (e.g. fxSAVE, wstETH)
Sail stability poolhs (leveraged)

After the bounty to bountyReceiver, remaining wrapped collateral / hs is transferred to the pools and attributed via notifyLiquidation / reward deposit paths. Depositors accrue them as claimable rewards — they do not auto-mint into the user’s ha balance. Claim with claim() / claimable.

4. Bounty on the live manager​

Live StabilityPoolManager_v1 pays the configured bounty (deployed 1%) to bountyReceiver. Protocol feeReceiver cuts apply on harvest, not on this rebalance path.

StabilityPoolManager_v2 on harbor harbor-yield also takes a rebalance cut (branch config: bounty 0.5%, cut 0.5%, ceiling 200× aboutADollar). That manager is not what ran on 16 October.

Illustrative example​

  • System CR drops below threshold (e.g. 130% → 120%).
  • Keeper calls rebalance(keeper, minPeggedLiquidated) (or any bountyReceiver).
  • ha is taken from both pools and redeemed via the minter.
  • Bounty tokens go to bountyReceiver; remaining wrapped collateral / hs return to the pools.
  • Collateral pool depositors can later claim wrapped collateral; Sail depositors can claim hs — proportional to pool accounting.

What this is not​

Do not assume these (not in the live SPM):

  • Rebalance queues or priority lanes
  • Gas reimbursement beyond the bounty
  • Circuit breakers / pause beyond normal access control
  • A separate “maximum rebalance size” parameter (sizing is whatever the pools can provide under the CR math + minPeggedLiquidated)

Depositor takeaways​

  1. Know which pool you are in (collateral vs Sail) — payout token differs.
  2. Monitor CR / rebalanceable().
  3. After a rebalance, claim reward tokens; ha balance may be lower due to the loss product.