# Rebalancing

In addition to leveraging, SuperVaults also allow for rebalancing vaults to use another collateral without requiring any additional capital.

For example, let's assume that in our example from the previous section, our leveraged asset did not appreciate in the way we predicted, and ETH actually entered a bear market. To minimize our risk from our leveraged position, we could `rebalance` our SuperVault to use a less risky collateral, such as USDC. The `rebalance` call does the following:

1. Take a flashloan of the starting collateral - in this example, we are rebalancing ETH to USDC, so the starting collateral is ETH and the rebalanced collateral is USDC.
2. Use an aggregator to swap the borrowed starting collateral for the rebalanced collateral.
3. Deposit the rebalanced collateral into a new vault, and borrow PAR from the new vault
4. Use the borrowed PAR to pay back any outstanding debts on the starting collateral vault
5. Withdraw all starting collateral from the vault to repay back the loan

The amount of PAR we can borrow in step 3 is limited by the MCR of the rebalanced collateral. Thus, rebalancing is much more effective for moving to collaterals with lower MCRs as that will allow us to rebalance more collateral.

Note: Only vaults created by through the `MIMOProxy` can be rebalanced.


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