Reshuffling

DeFi moves fast: yields change, risks emerge, new protocols launch. What worked yesterday might not be optimal today. That’s why Shift reshuffles its portfolios regularly, not to chase trends, but to keep allocations aligned with the current market and our defined risk limits.

Reshuffling means updating the portfolio to maintain the best possible risk-reward balance. It’s an ongoing optimization process, always asking: Is this still the smartest allocation for today?

Daily challenge: are we still optimized?

Shift approaches portfolio management as a live challenge, not a one-time setup. Our back office and DeFi team check performance and risk metrics daily. If something drifts (maybe APY drops, volatility spikes, or a protocol rating changes) we immediately evaluate whether a reshuffle makes sense.

This doesn’t mean we constantly churn the portfolio. Instead, it means we’re always calibrated, ready to adjust when there’s a clear reason. The goal is to stay as close as possible to the “optimal portfolio” — the mix of assets that delivers the best risk-adjusted return within all our safety limits.

What is the optimal portfolio?

The optimal portfolio isn’t about chasing the highest yield — it’s about finding the best return per unit of risk, while staying within diversification rules and exposure caps. It’s the best possible allocation today for a given risk appetite.

This target shifts over time. If a protocol improves its risk score or a new opportunity offers better returns with similar risk, the optimal portfolio changes. We model these shifts constantly using both our team’s insight and tools like our Portfolio Construction Tool (PCT).

There’s always a gap between the actual and the optimal allocation. When that gap is large enough and the improvement outweighs the cost, we reshuffle.

Reshuffling only when it adds value

We don’t reshuffle for small changes or noise. Every adjustment needs a clear, quantifiable reason, such as:

• A big change in yield or risk score

• A position growing too large due to price movement

• A newly available strategy that outperforms current ones

When that happens, we move capital from lower-value allocations to higher-value ones —efficiently and strategically.

Efficiency matters. We minimize slippage, gas fees, and other costs. If it’s a big shift, we break it into tranches or use cross-chain routing tools to avoid bottlenecks. If network fees are high, we time transactions smartly. Execution routes are optimized across DEX aggregators, bridges, or relayers.

Every reshuffle must deliver more benefit than cost — whether that’s better yield, lower risk, or improved diversification.