Add mechanism for rebalancing the managed asset allocation

[pmiklos]

Assuming the fund is set up with fixed or dynamic asset allocations, as the market changes the asset allocation might diverge from the target. There is a need for a mechanism that helps rebalance the fund portfolio towards the target allocation. Few ideas:

Asset Allocation:

• 4

• 5

Rebalancing:

• allow the community to exchange one managed asset to another of the same value
• exchanging assets should be constrained so one cannot push the portfolio further from the target allocation, or
• if an exchange further diverges the portfolio from the target, a penalty is applied that can be added to incentive rewards (see next)
• incentives for the community to participate in rebalancing the portfolio could be a small reward that can be considered as management fee
• the rebalancing reward could be proportionate to the degree of the imbalance and the improvement resulted from the rebalancing effort.

[pmiklos]

Rebalancing the fund by exchanging one managed asset to another can be vulnerable to price oracle bugs or hacks. Even if a non-malicious glitch happens and let's say the price of one asset drops, someone could potentially exploit that:

• assume there is a BTC-ETH fund with 4 BTC and 60 ETH in managed assets
• price oracle misreports the price of the ETH as $1.00 at a real market price $1000.00
• malicious actor sends 0.006 BTC of value $60 and receives 60 ETH of the same value at the incorrect oracle price, that is worth $60,000 in real market price

Note, that similar exploit may happen when purchasing shares from the fund as well. In that case, if the price of the asset used to purchase shares is misreported by the oracle by let's say 10 fold, the user would receive disproportionate amount of shares that could be used to drain big chunk of the fund.