What is a Rebalance Delay?
Learn why waiting before rebalancing can save you money.
Key Takeaways
- Rebalance delay is how long Snuggle waits after price leaves your range
- Waiting avoids unnecessary rebalances when prices bounce back
- The optimal delay balances fee loss vs impermanent loss
Why Waiting Pays Off
The price leaves your range. Should Snuggle rebalance right away? Usually, no.
Prices bounce around. They go up, then down, then up again. This is called a whipsaw. If you rebalance every time the price dips outside your range, you waste money on rebalances that were not needed.
The Rubber Band Analogy
Think of price like a rubber band. Pull it away from center and it often snaps back. If you react to every stretch, you are chasing the rubber band. Wait a moment and it may return on its own.
Rebalance delay is the waiting period. It tells Snuggle: "The price is out of range. Wait this long before doing anything."
How It Works
Say your delay is set to 2 hours. The price moves outside your range at 10:00 AM.
Snuggle's keeper checks regularly. It sees the price is out of range. But it waits. At 12:00 PM, it checks again. If the price is still out of range, it rebalances. If the price came back, it does nothing.
No unnecessary impermanent loss. And Snuggle covers all rebalance gas costs, so you pay nothing.
Finding the Right Delay
Short delays (1-2 hours) work for stable pairs. These prices do not swing far. If they leave the range, they probably will not come back soon.
Longer delays (4-8 hours) work for volatile pairs. ETH and BTC prices bounce around a lot. Waiting longer avoids reacting to normal price swings.
Snuggle's backtest tool tests different delays against real data. It finds the one that earns the most after all costs. You pick your delay when you deposit. Change it anytime.
The Balance
Every hour out of range, you miss fees. That is the cost of waiting. But every unnecessary rebalance creates impermanent loss. That is the cost of acting too fast.
The right delay balances both. Snuggle's optimizer finds that balance for each pool.
What You Learned
- Rebalance delay is how long Snuggle waits after price leaves your range
- Waiting avoids unnecessary rebalances when prices bounce back
- The optimal delay balances fee loss vs impermanent loss