> For the complete documentation index, see [llms.txt](https://midashand-1.gitbook.io/midaspredict/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://midashand-1.gitbook.io/midaspredict/for-creators/rebalancing-your-market.md).
# Rebalancing Your Market
When you seed a market, your liquidity enters at a fixed, neutral distribution — typically 50/50 for a binary market, or evenly across outcomes for multi-outcome. That's how every market launches: balanced and ready to trade either side.
But as traders push the price one way or the other, your anchored seed stays put while the market moves on. **Rebalancing** lets you internally withdraw that anchored position and redeploy it around the current odds — or further, in the direction you actually believe.
***
### Who Can Rebalance
Rebalancing is a **creator-only** action, scoped tightly. Three rules:
| Rule | What it means |
| ---------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------- |
| **Only market creators** | Regular traders cannot rebalance. The feature is restricted to addresses that created a market. |
| **Only your own markets** | You can rebalance markets *you* created. You can never touch another creator's seed in their market. |
| **Only your seed inventory** | The Rebalance screen swaps the YES/NO shares you received when you seeded — not shares you may have bought afterward as a regular trader. |
Trader-side shares (any shares you bought in your own market through the regular Buy / Sell panel) stay separate from your seed bucket and are managed through normal trading, not the Rebalance screen.
***
### Where to Find It
Open **Profile → My Markets** and click the **`...`** action button on any market you've created. **Rebalance** is the first option in the dropdown.
The same dropdown also gives you View Analytics, Share, and Claim for resolved markets.
***
### Why Rebalancing Matters
Two things go wrong if you seed a market and never realign it:
* **Your seed gets stuck at stale odds.** The market may now think the answer is 70/30; your seed is still anchored at 50/50. As the LS-LMSR curve stretches to accommodate the new skew, your anchored position takes mild curve-driven losses — small in high-volume markets where your creator fees offset them, but meaningful in low-volume or heavily skewed markets where they don't.
* **You can't express conviction with your liquidity.** Without rebalancing, your seed is locked into the launch distribution. You earn fees as a passive market-maker, but you can't take a directional position based on what you actually believe.
Rebalancing turns your seed from "set it and forget it" into an active position you can update as your view — or the market — changes.
***
### What Rebalancing Actually Does
Rebalancing swaps your own seed inventory inside your own market — internally withdrawing your anchored position and redeploying it around current prices. When you rebalance, you can:
* Realign your seed with the market's current odds, reducing the curve drift you'd otherwise absorb.
* Tilt your position toward an outcome you have conviction in, taking on directional exposure on purpose.
* Adjust your risk profile if the market has moved further from your comfort zone than you expected.
> 🔒 **Scope:** Only **you** can rebalance **your** seed inventory. You can't touch positions held by anyone else, and no other creator, trader, or admin can touch yours.
> 🧩 **Works the same for multi-outcome markets.** A 5-way market seeds at 20% across each outcome (or whatever even split applies). Rebalancing is the same swap mechanic — pick which outcomes to sell, pick which to buy, the LS-LMSR curve handles the rest. The Rebalance Ratio still describes the per-share exchange rate at current odds.
***
### When to Rebalance
There's no required schedule, but three practices reliably produce better outcomes:
* **Rebalance early.** The sooner you realign your seed after the market moves, the more exposure you can shift toward the side you actually believe in — and the less curve drift you absorb in the meantime.
* **Watch markets near resolution.** Odds tighten quickly as resolution approaches. A smart late rebalance can reduce unwanted exposure or lock in a cleaner risk profile.
* **Use rebalancing to adjust risk, not to chase outcomes.** It's a positioning tool. Tilting hard toward a side after price has already moved means you're paying the expensive ratio to take a directional bet — fine if you have real conviction, but it's not a recovery mechanism.
Common triggers creators watch for: price drifting meaningfully from your seed's anchored distribution, your view shifting on new information, a related upstream event resolving and changing conditional context, or a low-volume market where curve drift is starting to outpace your fee income.
***
### Walking Through the Rebalance Screen
When you click Rebalance, you get a side-by-side view of your current position and a live preview of what changes when you rebalance:
Here's what each section does:
**Sell Outcomes (left).** Pick which side of your inventory to reduce. The example shows the creator holding 233,794.59 NO shares while NO trades at 62.85%. The slider or `Max` button sets how many to sell.
**Buy Outcomes (bottom left).** Choose the outcome you want to increase exposure to. In the screenshot, YES is the buy side at 37.14%.
**Current Market Position (right top).** A snapshot of where you stand right now — probabilities and your share count per outcome.
**After Rebalance (Preview).** A live preview of your new position if you confirm. As you move the slider, this updates in real time so you can see exactly where you'll land before signing.
**Rebalance Ratio.** Shows the LS-LMSR conversion rate at this moment — "for every 1 share you sold, you will get X shares of the other outcome." Think of it as a swap rate based on current market prices:
* If you're swapping a cheap outcome into an expensive one, expect **fewer** shares back (you're buying into the favorite).
* If you're swapping an expensive outcome into a cheap one, expect **more** shares back (selling high, buying low).
When the preview looks right, hit **Confirm Rebalance**. One on-chain transaction, no other creator's seed is touched.
> ⚠️ **Rebalancing moves the price.** Your swap routes through the LS-LMSR curve, exactly like a regular trade. When you sell NO shares back to the AMM and buy YES, you're pushing the curve: NO's price drops and YES's price rises for everyone in the market. The Rebalance Ratio in the preview reflects the curve state at that moment — large rebalances on thin markets move prices more than small ones on liquid markets, and you pay LS-LMSR slippage proportional to the swap size.
>
> The slippage you pay isn't lost — under LS-LMSR, **price impact stays in the pool and is redistributed to winning shares at resolution.** Deep, balanced markets can settle above $1 per winning share for this reason.
> 💡 **Rebalancing is a share-swap, not a withdrawal.** It shifts *your seed exposure* between outcomes within the market. To take money to your wallet, you sell shares back to the market like any trader, or wait until resolution to redeem.
***
### Optional, Not Mandatory
Rebalancing is **optional**. You can seed a market and never touch it again — the market keeps running and you'll still collect creator fees. But:
* **Creators in low-volume or heavily skewed markets** absorb mild curve drift losses that can outpace their fee income if they stay anchored at neutral.
* **Creators with strong convictions** can't express them through their liquidity without rebalancing — they're locked into a market-maker role rather than a position-taker role.
* **Markets that look healthier attract more volume.** Liquidity that reflects current odds (rather than launch-day odds) makes the market feel more responsive to traders, which can mean more volume and more fees for you.
If you treat market creation like running a small active position — checking in, adjusting when the market moves, expressing your view when you have one — the economics work better than passive seeding.
***
### What Rebalancing Does NOT Do
A few things to be clear on:
* **It doesn't change the market's question, outcomes, or resolution rules.** Those are locked at creation.
* **It doesn't withdraw capital to your wallet.** Rebalancing is a share-swap *inside* the market. To pull money out, you sell shares back to the market like any trader, or wait for resolution.
* **It doesn't touch other people's positions, or your own trader-side positions.** Only your seed inventory is affected. Shares you bought as a trader in your own market are managed through normal buy/sell.
* **It's not free.** You pay LS-LMSR slippage on the swap (just like any other trade against the curve), plus LitVM gas. Large swaps on thin markets pay more.
* **It's not a way to cancel your market.** Markets can't be cancelled after going Active. Rebalancing manages your position *within* an active market.
Note that rebalancing **does** move the market price — your swap goes through the same LS-LMSR curve as regular trades. See the price-impact callout above.
***
### FAQ
How often can I rebalance?
There's no protocol-level cap. You can rebalance as often as the gas cost and slippage are worth it to you. The right cadence depends on your market: a fast-moving market with frequent price shifts may justify several rebalances; a quiet market may not need any.
Can I withdraw my capital early using rebalancing?
No. Rebalancing is a share-swap, not a withdrawal — it moves your exposure between outcomes, but the total value stays inside the market. To pull capital out before resolution, you sell shares back to the market like any trader (subject to market depth and price impact). To fully exit, you wait for resolution and redeem your shares.
Does rebalancing affect my Midas Points?
No. Your seed-amount MP is awarded once, at market creation. Rebalancing is a position-management action — not a new seed event — so it doesn't issue new MP and doesn't claw back the MP you already earned.
Can anyone else rebalance my market?
No. Rebalancing is permissioned to the wallet address that created the market. No other user — creator, trader, or admin — can touch your position.
Can I rebalance shares I bought as a trader in my own market?
No. The Rebalance screen only swaps your **seed inventory** — the YES/NO shares you received when you first seeded the market. If you've also bought additional shares through the regular trade interface, those are part of your trader-side balance and you manage them through normal Buy / Sell, not through Rebalance.
What happens if I rebalance right before resolution?
Late rebalancing isn't off the table — in fact, it can be smart. Odds tighten quickly as resolution approaches, and a well-timed late swap can reduce unwanted exposure or lock in a cleaner risk profile. The trade-off is slippage: as prices push toward 0 or 1, the curve gets less forgiving, so large late swaps pay more impact. Check the preview pane before confirming.
Is there a fee for rebalancing?
You pay LitVM gas (typically sub-cent) plus LS-LMSR slippage on the swap. The swap routes through the same curve as a regular trade, so the rebalance ratio reflects current curve state and large swaps pay more impact than small ones. Always check the preview pane before confirming — it shows exactly how many shares you'll receive and the implied price move.
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