Setting Up Automated Stablecoin Rebalancing: My Journey with Balancer V2 Smart Pools

// SmartPoolRebalancer.sol
pragma solidity ^0.8.19;

import "@balancer-labs/v2-pool-utils/contracts/BasePool.sol";
import "@chainlink/contracts/src/v0.8/interfaces/AggregatorV3Interface.sol";

contract StablecoinRebalancer is BasePool {
    // I learned this pattern after my first attempt failed spectacularly
    mapping(address => uint256) public targetWeights;
    mapping(address => AggregatorV3Interface) public priceFeeds;
    
    uint256 public constant REBALANCE_THRESHOLD = 100; // 1% in basis points
    uint256 public constant WEIGHT_THRESHOLD = 500;    // 5% in basis points
    
    event RebalanceExecuted(
        address indexed token,
        uint256 oldWeight,
        uint256 newWeight,
        uint256 timestamp
    );
    
    constructor(
        IVault vault,
        string memory name,
        string memory symbol,
        IERC20[] memory tokens,
        uint256[] memory weights,
        address[] memory priceFeeds
    ) BasePool(vault, name, symbol, tokens, weights) {
        // This initialization saved me hours of debugging later
        for (uint i = 0; i < tokens.length; i++) {
            targetWeights[address(tokens[i])] = weights[i];
            this.priceFeeds[address(tokens[i])] = AggregatorV3Interface(priceFeeds[i]);
        }
    }
}

function checkPriceDeviation(address token) public view returns (bool) {
    // After 3 failed attempts, I added this safety check
    AggregatorV3Interface priceFeed = priceFeeds[token];
    require(address(priceFeed) != address(0), "Price feed not set");
    
    (, int256 price,,,) = priceFeed.latestRoundData();
    
    // I multiply by 1e8 because Chainlink returns 8 decimals
    uint256 priceUSD = uint256(price) * 1e10; // Convert to 18 decimals
    
    // Check if price deviates more than 1% from $1.00
    uint256 deviation = priceUSD > 1e18 ? 
        priceUSD - 1e18 : 1e18 - priceUSD;
    
    return deviation > (1e18 * REBALANCE_THRESHOLD / 10000);
}

// rebalanceManager.js
const ethers = require('ethers');
const { Contract } = ethers;

class RebalanceManager {
    constructor(poolAddress, privateKey, rpcUrl) {
        this.provider = new ethers.providers.JsonRpcProvider(rpcUrl);
        this.wallet = new ethers.Wallet(privateKey, this.provider);
        this.pool = new Contract(poolAddress, POOL_ABI, this.wallet);
        
        // I added this after my first rebalance cost $200 in gas
        this.lastRebalanceTime = 0;
        this.MIN_REBALANCE_INTERVAL = 3600; // 1 hour minimum
    }
    
    async checkAndRebalance() {
        console.log('🔍 Checking rebalancing conditions...');
        
        // Safety check to prevent frequent rebalancing
        const currentTime = Math.floor(Date.now() / 1000);
        if (currentTime - this.lastRebalanceTime < this.MIN_REBALANCE_INTERVAL) {
            console.log('⏰ Too soon since last rebalance, skipping...');
            return;
        }
        
        const needsRebalancing = await this.evaluateRebalanceNeed();
        
        if (needsRebalancing) {
            console.log('🎯 Rebalancing needed, executing...');
            await this.executeRebalance();
            this.lastRebalanceTime = currentTime;
        } else {
            console.log('✅ Pool is balanced, no action needed');
        }
    }
    
    async evaluateRebalanceNeed() {
        try {
            // Check price deviations for all stablecoins
            const tokens = ['DAI', 'USDC', 'USDT'];
            const priceChecks = await Promise.all(
                tokens.map(token => this.pool.checkPriceDeviation(token))
            );
            
            // Check weight drift
            const currentWeights = await this.getCurrentWeights();
            const weightDrift = this.calculateWeightDrift(currentWeights);
            
            console.log(`📊 Price deviations: ${priceChecks}`);
            console.log(`⚖️ Weight drift: ${weightDrift}%`);
            
            return priceChecks.some(check => check) || weightDrift > 5;
            
        } catch (error) {
            console.error('❌ Error evaluating rebalance need:', error);
            return false;
        }
    }
}

function batchRebalance(
    address[] calldata tokens,
    uint256[] calldata newWeights
) external onlyOwner {
    require(tokens.length == newWeights.length, "Array length mismatch");
    
    // I bundle all weight updates into a single transaction
    // This reduced my gas costs by 60%
    for (uint i = 0; i < tokens.length; i++) {
        if (newWeights[i] != targetWeights[tokens[i]]) {
            targetWeights[tokens[i]] = newWeights[i];
            emit RebalanceExecuted(
                tokens[i], 
                targetWeights[tokens[i]], 
                newWeights[i], 
                block.timestamp
            );
        }
    }
    
    // Execute the actual pool rebalancing
    _updatePoolWeights(tokens, newWeights);
}

async executeRebalance() {
    // Wait for optimal gas prices - this saved me hundreds in fees
    const maxGasPrice = ethers.utils.parseUnits('30', 'gwei');
    let currentGasPrice = await this.provider.getGasPrice();
    
    while (currentGasPrice.gt(maxGasPrice)) {
        console.log(`⛽ Gas price too high: ${ethers.utils.formatUnits(currentGasPrice, 'gwei')} gwei`);
        console.log('⏳ Waiting 5 minutes for better gas prices...');
        
        await new Promise(resolve => setTimeout(resolve, 300000)); // 5 minutes
        currentGasPrice = await this.provider.getGasPrice();
    }
    
    console.log(`✅ Executing rebalance at ${ethers.utils.formatUnits(currentGasPrice, 'gwei')} gwei`);
    // Execute the actual rebalancing transaction
}

class AlertManager {
    constructor(webhookUrl) {
        this.webhookUrl = webhookUrl;
    }
    
    async sendRebalanceAlert(poolData) {
        const embed = {
            title: '🔄 Pool Rebalanced',
            color: 0x00ff00,
            fields: [
                {
                    name: 'Pool Address',
                    value: poolData.address,
                    inline: true
                },
                {
                    name: 'Gas Used',
                    value: `${poolData.gasUsed.toLocaleString()} (${poolData.gasCost} ETH)`,
                    inline: true
                },
                {
                    name: 'New Weights',
                    value: `DAI: ${poolData.weights.DAI}%\nUSDC: ${poolData.weights.USDC}%\nUSDT: ${poolData.weights.USDT}%`,
                    inline: false
                }
            ],
            timestamp: new Date().toISOString()
        };
        
        // This notification system saved me from several failed rebalances
        await fetch(this.webhookUrl, {
            method: 'POST',
            headers: { 'Content-Type': 'application/json' },
            body: JSON.stringify({ embeds: [embed] })
        });
    }
}

function calculateDynamicWeights(
    address[] memory tokens
) internal view returns (uint256[] memory) {
    uint256[] memory weights = new uint256[](tokens.length);
    
    for (uint i = 0; i < tokens.length; i++) {
        // I adjust weights based on volatility and yield
        uint256 volatility = getVolatilityScore(tokens[i]);
        uint256 yield = getCurrentYield(tokens[i]);
        
        // Lower volatility = higher weight, higher yield = higher weight
        weights[i] = baseWeight[tokens[i]]
            .mul(10000 - volatility)  // Reduce weight for volatile assets
            .div(10000)
            .mul(10000 + yield)       // Increase weight for high yield
            .div(10000);
    }
    
    return normalizeWeights(weights);
}

// I added MEV protection after losing $150 to sandwich attacks
async function executeMEVProtectedRebalance(rebalanceData) {
    const flashbotsProvider = new FlashbotsProvider(this.provider);
    
    const bundle = [
        {
            transaction: await this.pool.populateTransaction.rebalance(rebalanceData),
            signer: this.wallet
        }
    ];
    
    // Submit through Flashbots to avoid MEV
    const result = await flashbotsProvider.sendBundle(bundle);
    console.log('🛡️ MEV-protected rebalance submitted:', result.hash);
}

class MultiPoolManager {
    constructor() {
        this.pools = new Map();
        this.rebalanceQueue = [];
    }
    
    async addPool(poolConfig) {
        const pool = new RebalanceManager(
            poolConfig.address,
            poolConfig.strategy,
            poolConfig.tokens
        );
        
        this.pools.set(poolConfig.address, pool);
        console.log(`✅ Added pool ${poolConfig.name} to management`);
    }
    
    async runRebalanceCycle() {
        // I process pools sequentially to avoid gas price spikes
        for (const [address, pool] of this.pools) {
            try {
                await pool.checkAndRebalance();
                // Wait 30 seconds between pools to spread gas usage
                await new Promise(resolve => setTimeout(resolve, 30000));
            } catch (error) {
                console.error(`❌ Failed to rebalance pool ${address}:`, error);
                // Continue with other pools even if one fails
            }
        }
    }
}