Interconnectivity of Bundles via $BUN

The Bundles protocol connects bundles through $BUN's value and dynamics. Rebalancing fees, paid exclusively in $BUN, generate demand during adjustments. As $BUN's weight deviates from 5%, it influences thresholds across bundles, creating a network where one bundle's rebalancing affects others.

Core Mechanism: $BUN's Role in Adjustments

The 5% $BUN allocation serves as an integrated reserve for rebalancing, allowing swaps without external markets. Activity, such as inflows, outflows, or volatility—shifts $BUN's value, prompting interconnected adjustments that stabilize the ecosystem.

How Interconnectivity Functions in Practice

1. Rising $BUN Value:

   • Bundles with excess $BUN (above 5%) sell it during rebalancing.

   • Proceeds to buy underperforming assets in the bundle or related ones.

   • Effect: Reallocates value from $BUN to undervalued assets, capturing recoveries across bundles.

2. Falling $BUN Value:

   • The threshold lowers dynamically, enabling earlier rebalancing.

   • Bundles buy $BUN to restore 5% weight, often at a discount, using overweight assets.

   • Effect: Creates buy-low opportunities, linking bundle recoveries via $BUN purchases.

In short, $BUN makes bundles work as a whole, using shared adjustments for stronger results. See the Rebalancing Process for more details.