> For the complete documentation index, see [llms.txt](https://docs.aera.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.aera.finance/v1-archive/concepts/vault-guardian/weight-update.md). # Weight Update The primary mechanism for portfolio rebalancing is an update of the underlying [Balancer Managed Pool](/v1-archive/concepts/aera-vault/balancer-managed-pool.md) weights using Balancer's `updateWeightsGradually` function. ### How weight updates contribute to efficient rebalancing There are several mechanisms that can facilitate portfolio rebalancing on-chain. An auction mechanism is the most popular alternative and allows a set of bidders to make price quotes. The problem with auction mechanisms for frequent rebalancing is as follows: * Auctions are overly sensitive to current market price, * Auctions restrict participation to larger pools of capital and infrastructure to identify and participate in the auction. Instead, Aera elects to rebalance portfolio using a Balancer Managed Pool by using weight schedules that steadily change the spot price over time. This has several benefits: * Many more market participants are participating in Aera trading (even unknowingly, for example by using trade routing services), * Rebalancing is spread out over time, retaining some of the benefits of TWAP trading. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.aera.finance/v1-archive/concepts/vault-guardian/weight-update.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.