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Short Withdrawal Token Accounting #37
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jalextowle
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jalextowle/hyperdrive/short-withdrawal-token-accounting
Feb 8, 2023
Merged
Short Withdrawal Token Accounting #37
jalextowle
merged 18 commits into
main
from
jalextowle/hyperdrive/short-withdrawal-token-accounting
Feb 8, 2023
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lgtm
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This PR adds accounting to the$z_1$ , the amount of shares the short pays to the pool at closing. The withdrawal proceeds (in shares) are debited from the share reserves at the same time that the share proceeds of the short are debited from the share reserves. Mathematically, this can be represented as $z += z_1 - t \cdot z_1$ , where $t$ is the proportion of shorts being closed that are attributed to the withdrawal pool. If $t = 0$ , then the accounting is identical to the current system. If $t =1$ , then $z$ is isn't updated at all, which gives value of the bonds sold by the LP to the withdrawal pool.
closeShortflow that pays out as many outstanding short withdrawal shares as possible. The withdrawal proceeds that will be attributed to the withdrawal pool are equivalent to the proceeds obtained from closing a long position because LPs take on a long position when a short is opened. The withdrawal proceeds (in shares) is equal to