Over time, the distribution of value in your bundle changes. Certain cryptocurrencies will rise / fall faster than others. This will change your risk because your bundle is more affected by an increase or decrease of a cryptocurrency with a large share in your bundle. During balancing, the deviation from the original distribution is restored by selling part of the cryptocurrencies that have gotten a larger share and buying the cryptocurrencies of which the share has become smaller.
The degree to which you go back to the original distribution can be set as soft, medium or hard. In the soft balancing strategy, only a limited amount of deviation is run in, at medium it is half of the deviation, and in the case of hard re-balancing the shares are always fully restored to the original distribution. More information on the different possibilities and the costs of balancing can be found here.
You can change the original distribution to your own personal target distribution. To do so, go to Bundles+Balancing and click on “What is a target distribution and how do I update this?”