Inventory balance logic

Inventory Balance Logic describes how your token holdings change as the market moves through price levels and liquidity is used. In Orbit Finance liquidity is not a static lump of capital. It lives in discrete bins at different prices. When price moves and trades occur, some of your tokens get used on one side of the pool and return to you on the other, changing the mix of tokens you hold. That change in holdings is what we call your inventory balance.

Imagine you own equal parts of two assets at the start, and the market begins to move. If price rises and trades continue to execute against the sell side, your position gradually becomes heavier in the other asset as buyers pull liquidity from one side. Conversely, if price falls and trades hit the buy side, you accumulate more of the first asset. Over time, those shifts in token composition represent how your inventory has been balanced by price movement and trade flow.

This logic matters because inventory shapes both your exposure and how fees are earned. When liquidity stays within active bins, your tokens are being used and earning fees. But as price moves out of your range or toward one side, your inventory can become skewed. That skew reflects market direction, not a failure of the system. For example, if a pool is experiencing strong buying pressure, inventory adjusts so that more of the bought token ends up in your wallet. That change is a natural outcome of making liquidity available at specific price levels.

Orbit Finance’s inventory balance logic is transparent and predictable. You can see how price changes translate into changes in your token holdings because each bin “pays out” according to the trades that happen in it. This also means that rebalancing isn’t just about moving capital back into preferred price ranges. It’s also about managing how asset weights change over time and choosing when to convert or adjust those balances. Smart liquidity management takes both fee earning and inventory balance into account, so you always know where your exposure sits and why it moved that way.