Liquidity Rebalancing

Purpose

Cyclic compression reduces gross obligation value but rarely reduces it to zero. Structurally net-importing or net-exporting domains require an explicit mechanism to restore balanced liquidity over time — this is rebalancing.

Mechanisms

Residual exposure per domain pair may be resolved through: (a) scheduled capital transfer between domain liquidity pools, (b) absorption into the following epoch if exposure remains within tolerance, or (c) external liquidity provisioning outside the current scope of the protocol.

Circuit Breaker

A domain whose exposure exceeds its configured tolerance for more than one epoch is flagged, and new obligation routing toward it is throttled until rebalancing completes. This is the network's primary systemic safeguard against unbounded exposure accumulation — see 19 · Adversarial Model for discussion of its limits.