There are several rebalancing mechanisms in the WINR Liquidity Pool. Rebalancing is utilized to have the assets in the pool keep up with the demand from the players.

The WINR DAO governs the targeted weights of the tokens in the index composition.

Swap fees that occur during regular swaps through the pool, or if a player has chosen a different payout currency, then the input currency increases if the output currency has a lower weight than the targeted weight. This incentivizes swaps with the output token with a lesser fee, which in the long term, helps rebalance the pool.

The fee generated while purchasing or selling WLP increases if the weight of the input or the output currency is lower or higher than the targeted weight. This incentivizes liquidity providers to purchase WLP with the tokens that have a lower fee while providing a lower selling fee to those who want to sell their WLP.

To rebalance itself, the WLP has a built-in swap function that utilizes liquidity in a third-party AMM, like GLP. This function can be called by the WINR DAO using multisig wallets.

The pool offers swaps with no fee if the weight of a token reaches a certain threshold. Arbitrage bots will utilize this to rebalance the pool.

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