How your funds are rebalanced

Rebalancing is a key part of ensuring that you earn the highest rate over time.

Nook customers can earn through five money markets. These money markets are based on stablecoin yields, and their rates are always changing (based on market supply and demand as covered in How Nook earns Higher Rates.

Over the past year, the four markets (Seamless Morpho Vault, AAVE Core and Spark Morpho Vault) have averaged 8.3%, 7.2% and 5.4%, APY, respectively. So it might seem obvious to just go with the highest earning market. Not exactly.

If we look closer into the details, having a range of five plus options to automate across has actually resulted in a 14.5% increase in earning rates. From an average of 8.3% → 9.5% APY over the past 365 days.

Rebalancing increases earnings and saves time

This is great for earning the highest market rate while still being able to deposit and withdraw at any time. But doing this yourself is tedious and time consuming. It requires constant monitoring of markets including hundreds of market changes per day. The time commitment adds up.

How does this work?

Every 24 hours, after monitoring the money markets throughout the day, we select the highest-earning market using a 24-hour trailing window. And if there is a sizable difference between that and the market your funds are currently in, a transfer of your funds from one market to the other is programmatically triggered. This ensures that you are always in the highest earning market.

To date, as part of these rebalances, Nook has processed over $100M in successful transactions through the platform. Paving the way to $1B in transactions.