Rebalance Position

Rebalance Position

Overview

When a V3/V4 LP position goes out of range, it stops earning fees. This skill handles the full rebalance workflow: collect accumulated fees, close the old position, calculate a new optimal range centered on the current price, and open a new position — all in a single operation.

This is a high-value skill because out-of-range positions are effectively dead capital. The difference between a monitored position that gets rebalanced promptly and an unmonitored one can be 15-30% APY in lost fee revenue.

When to Use

Activate when the user says:

• "Rebalance my position"
• "My position is out of range"
• "Adjust my LP range"
• "Re-center my liquidity"
• "Position #12345 is out of range, fix it"
• "My ETH/USDC position stopped earning"
• "Move my range to the current price"
• "My LP isn't earning fees anymore"

Also proactively suggest rebalancing when:

• A track-performance or portfolio-report shows an out-of-range position
• The user asks "why am I not earning fees?"

Parameters

*If no position ID: search with get_positions_by_owner, filter for out-of-range positions, and confirm with the user.

Workflow

Pre-Rebalance Analysis

Before executing anything, gather data and present the situation to the user:

Step 1: IDENTIFY THE POSITION
├── If position ID given → fetch via get_position
├── If "my X/Y position" → search via get_positions_by_owner
│   ├── Filter by token pair and out-of-range status
│   ├── If multiple out-of-range → list all, ask which one
│   └── If none out-of-range → "All your positions are in range!"
└── Validate: confirm the position IS actually out of range

Step 2: ANALYZE CURRENT SITUATION
├── Current pool state via get_pool_info
│   ├── Current price
│   ├── Pool TVL, volume, fee APY
│   └── Tick distribution (where is liquidity concentrated?)
├── Position details
│   ├── Current tick range (lower, upper)
│   ├── How far out of range (above or below?)
│   ├── Uncollected fees
│   ├── Current token balances in position
│   └── Time since going out of range (if estimable)
└── Cost-benefit calculation
    ├── Estimated gas cost for full rebalance (remove + add = ~$30-60 on mainnet)
    ├── Estimated daily fee revenue if rebalanced (from pool APY + position size)
    ├── Break-even time: gas_cost / daily_revenue
    └── If break-even > 30 days → WARN that rebalancing may not be worth it

Present the Rebalance Plan

Before executing, show the user exactly what will happen:

Rebalance Plan for Position #12345

  Current Situation:
    Pool:      WETH/USDC 0.05% (V3, Ethereum)
    Status:    OUT OF RANGE ⚠ (price moved above your range)
    Current:   $1,963
    Your range: $1,500 - $1,800 (position is 9% above upper bound)
    
  Uncollected Fees: 0.01 WETH ($19.60) + 15.20 USDC ($15.20)
  Position Value: ~$3,940

  Proposed New Range:
    Strategy: Medium (±15%)
    Lower:    $1,668 (current - 15%)
    Upper:    $2,258 (current + 15%)
    Expected time-in-range: ~80-85%

  Cost:
    Gas (remove + add): ~$35
    Break-even: ~2 days at current fee APY

  Steps:
    1. Collect uncollected fees ($34.80)
    2. Remove all liquidity from position #12345
    3. Add liquidity at new range ($1,668 - $2,258)
    4. New position created with new NFT ID

  Proceed? (yes/no)

Execution (after user confirms)

Step 3: DELEGATE TO LIQUIDITY-MANAGER
├── The agent executes atomically:
│   a. Collect fees from old position
│   b. Remove 100% liquidity from old position
│   c. Calculate new tick range based on:
│      - Current pool price
│      - Selected range strategy (narrow/medium/wide)
│      - Pool tick spacing
│   d. Approve tokens for new position (if needed)
│   e. Add liquidity at new range
│   f. Each step validated by safety-guardian
└── Returns: old position closed, fees collected, new position ID, new range, tx hashes

Step 4: PRESENT RESULT
├── Confirmation of old position closure
├── Fees collected (amounts + USD)
├── New position details (ID, range, amounts deposited)
├── Total gas cost for the operation
├── Net cost/benefit of the rebalance
└── Next steps for monitoring

Range Strategy Guide

When the user doesn't specify a range, use this decision framework:

When NOT to Rebalance

Proactively advise against rebalancing in these situations:

Output Format

Successful Rebalance

Position Rebalanced Successfully

  Old Position: #12345 (CLOSED)
    Received: 0.52 WETH + 950 USDC ($1,970)
    Fees collected: 0.01 WETH + 15.20 USDC ($34.80)

  New Position: #67890
    Pool: WETH/USDC 0.05% (V3, Ethereum)
    Deposited: 0.51 WETH + 965 USDC ($1,960)
    Range: $1,668 - $2,258 (medium, ±15%)
    Current: $1,963 — IN RANGE ✓
    
  Cost:
    Gas: $32.50 (2 transactions)
    
  Net: Position rebalanced with $2.30 lost to gas
       Now earning ~15-21% APY in fees

  Txs:
    Remove: https://etherscan.io/tx/0x...
    Add:    https://etherscan.io/tx/0x...

  Monitor: "How are my positions doing?" or "Track position #67890"

Position Already In Range

Position #12345 is IN RANGE ✓

  Pool:    WETH/USDC 0.05% (V3, Ethereum)
  Current: $1,963
  Range:   $1,700 - $2,300
  Status:  Actively earning fees

  No rebalance needed. Your position is healthy.
  
  Uncollected fees: $34.80
  Want to collect them? (This doesn't affect your position.)

Important Notes

• Always confirm before executing. Rebalancing involves closing and reopening a position — it's irreversible.
• Gas matters. On Ethereum mainnet, a full rebalance costs $30-60 in gas. On L2s (Base, Arbitrum), it's < $1. Factor this into recommendations.
• IL is locked in. When you close a position, any impermanent loss becomes realized. Mention this if the position has significant IL.
• New NFT ID. The rebalanced position gets a new NFT token ID. The old one is burned. Make sure the user understands this.
• V2 positions cannot be rebalanced — they have full range. If a user asks to rebalance a V2 position, explain that V2 positions cover the entire price range and don't go "out of range."
• Slippage on exit. For large positions relative to pool TVL, exiting may cause slippage. Warn if position is > 5% of pool TVL.

Error Handling