# Rebalancing & Strategy Execution

### Reserve Management <a href="#reserve-management" id="reserve-management"></a>

Each Node maintains a target reserve ratio of its underlying asset. For example, a Node might target 10% of USDC in reserve. Any excess above this target becomes available for investment in the Node's components.

<figure><img src="https://1075741769-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F6yeOl0TElnVRI1K1E8Bo%2Fuploads%2FAVXFQbJTiFGydjJ3RgOV%2FDeFi%20Jamming%20-%20Frame%207.jpg?alt=media&#x26;token=5cbe1676-dfa2-416b-9d08-c29aa55a970f" alt=""><figcaption></figcaption></figure>

### Rebalance Windows <a href="#rebalance-windows" id="rebalance-windows"></a>

To prevent excessive execution costs, investment transactions can only occur during specific rebalance windows. The Node owner sets both:

* Cooldown period between rebalances (e.g., 23 hours)
* Duration of rebalance window (e.g., 1 hour)

This means even if excess reserve is available, the rebalancer must wait for the cooldown to expire before starting a new rebalance window.

### Component Allocations <a href="#component-allocations" id="component-allocations"></a>

Each component in the Node has two key parameters:

* Target Weight: Desired allocation (e.g., 40% of assets)
* Maximum Delta: Allowed deviation (e.g., 5%)

<figure><img src="https://1075741769-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F6yeOl0TElnVRI1K1E8Bo%2Fuploads%2FgFYaDAT8KKwc0K4USRpd%2FDeFi%20Jamming%20-%20Frame%209.jpg?alt=media&#x26;token=81a38b78-8983-4117-b867-44f3f4df3114" alt=""><figcaption></figcaption></figure>

### Rebalancers can only invest in a component when three conditions are met: <a href="#rebalancers-can-only-invest-in-a-component-when-three-conditions-are-met" id="rebalancers-can-only-invest-in-a-component-when-three-conditions-are-met"></a>

1. Current allocation is sufficiently below target (beyond maxDelta)
2. Node has excess reserve above its target
3. Within an active rebalance window

This ensures disciplined execution of the Node's strategy while minimizing unnecessary transactions.[<br>](https://app.gitbook.com/o/JQDbnNDdWB3BfuF9py6m/s/6yeOl0TElnVRI1K1E8Bo/~/changes/43/~/revisions/rAZu56XWAinNqUfUrACl/user-documentation/portfolio-management)


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