# PDN Rebalance

### Defination

**PDN (Pseudo Delta Neutral) Imbalance Ratio** indicates the deviation of a position from a market-neutral status, **PDN Imbalance Ratio (PIR) is defined as follows: **

(thank to Darkray)

where:

**NSA**: Non-Stable**NSA in LP**: the amount of NSA in total position.

Due to the mechanics of Constant Product LP,

When

**PIR is positive**, it means that there are now**more**NSA tokens being held as Debt (**NSA Debt**) than in the LP Position (**NSA in LP**). Since the number of NSA tokens held as Debt only changes due to the borrowing interest rather than its price movements, this implies that the**price of the NSA token has risen**which is why there will be fewer NSA tokens in the LP position.If

**PIR is negative**, it means the NSA Debt is**less**than the NSA in LP. Similar to the Debt situation above, this implies that the**price of the NSA token has fallen**which is why there will be more NSA tokens in the LP position.

Reference:

PIR threshold is set to **abs(2)** by default to express if a position is market-neutral.

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