Rebalance Engine
The Rebalance Engine is the beating heart of PLX. It continuously monitors every vault’s leverage ratio and decides when to rebalance based on three key parameters:
Deviation Threshold – How far actual leverage can drift from target (e.g., ±4% for 2× vaults, ±2% for 5× vaults).
Volatility Context – Determines whether the vault should tolerate drift (in high volatility) or tighten precision (in stable trends).
Funding Optimization – Calculates whether maintaining current exposure yields better returns based on perp market funding rates.
Here’s how it works in practice:
When SOL rallies sharply and the SOL2X vault’s leverage spikes above 2.1×, the engine trims synthetic exposure to lock in profits and return to 2×.
When SOL dips and leverage falls to 1.9×, the vault opens additional exposure to restore the ratio.
During sideways chop, it widens the tolerance band to avoid wasting gas or incurring micro-losses from over-rebalancing.
This adaptive rebalancing strategy is what makes PLX’s non-liquidating leverage viable. Unlike centralized leveraged tokens that rebalance at fixed times (and decay heavily in chop), PLX rebalances only when it makes economic sense.
Over time, this leads to significantly higher performance and stability — which is why PLX vaults like SOL5X or PUMP5X can maintain their intended risk profiles while still producing efficient compounding during long rallies.
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