Rebalance, Liquidnet’s electronic dealer‑to‑dealer (D2D) risk‑transfer protocol, has entered a decisive new phase of growth, one that the market is increasingly recognising. What began as a tool to streamline portfolio‑level risk transfer is now gathering the momentum associated with a meaningful shift in how dealers manage balance sheets, liquidity, and operational efficiency.
Crucially, this acceleration is being driven by market participation, not structural change or governance models. Activity is rising because more dealers across the street are choosing to use the protocol, reinforcing the network effects generated by growing engagement.
As David Johnsen, head of fixed income at Liquidnet, put it: “The past year has proven what Rebalance can achieve as participation grows. Critical mass is fast approaching given the momentum we’re building by clients who increasingly want a credible, competitive option to the incumbent offering.”
A purpose‑built solution for modern D2D risk transfer
Launched in Europe in 2020 and the US in 2021, Rebalance provides dealers with an efficient way to clear residual risks from bond portfolios. The protocol enables users to upload full portfolios and configure execution parameters via API or Liquidnet’s award‑winning FUSION GUI, replacing slow, manual workflows with streamlined electronic execution.
For clients, the benefits are clear: cleaner balance sheets, reduced operational burden, faster turnover, and more time freed up time to focus on client activity rather than manage stale positions.
These fundamentals have been consistent since launch. What has changed is the scale of market adoption and the speed at which usage is increasing. Johnsen emphasises the market-led nature of the shift: “Momentum is market‑driven. As more dealers engage, liquidity compounds, and the utility of the protocol rises for everyone involved.”
Growth powered by dealer participation
Over the past six months, Rebalance has seen a significant uplift in activity driven by broad‑based dealer engagement. As more desks use the protocol for day‑to‑day portfolio optimisation, liquidity deepens, execution becomes more efficient, and the value of participation increases for all users.
This creates a classic network effect, a powerful dynamic in fixed income, where liquidity is often fragmented and behavioural change can be slow. Once a venue crosses a certain activity threshold, adoption tends to accelerate rapidly and organically.
Momentum by the numbers
Rebalance’s performance in 2025 highlights the scale of the shift. Comparing the second half of 2025 with the same period in 2024, US participation rose by 40%, US-traded volumes more than tripled, and EMEA traded volumes doubled.
These are not marginal gains; they indicate a shift towards a liquidity venue that is increasingly self‑reinforcing. Early 2026 has continued in the same direction, with multiple platform records set in January. As Johnsen summarises: “We’re approaching the point where liquidity becomes self‑sustaining. That’s when adoption moves from steady to structural.”
Why rebalance is advancing
Three structural strengths underpin this growth:
- A dealer‑friendly commercial model: Rebalance’s pricing is designed to support broad dealer participation across diverse balance‑sheet profiles and risk appetites.
- A broad and highly engaged dealer community: years of connectivity have produced an active and responsive ecosystem of market makers, supporting rapid adoption and deeper liquidity.
- A modern, flexible protocol: optimised for today’s D2D workflows, Rebalance is fast, intuitive and transparent, supporting both API‑driven automation and efficient GUI‑based interaction.
Together, these factors reinforce each other, forming a growth flywheel. Johnsen adds: “The combination of engaged participants, compelling economics, and fit‑for‑purpose tech is what’s driving the acceleration. It’s simple: participation creates liquidity, and liquidity attracts participation.”
Approaching critical mass
If current momentum continues, 2026 could be a pivotal year. Rebalance is increasingly recognised as a credible and competitive alternative for portfolio‑level D2D risk transfer, and it is approaching the liquidity threshold at which network effects become self‑sustaining.
As dealers look for ways to optimise inventory, streamline workflows and enhance execution efficiency, Rebalance’s trajectory suggests a wider shift in fixed income risk‑transfer practices is already underway, and accelerating as participation continues to grow.