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Fix Protocol Liquidation Fee calculation #313

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Merged
merged 1 commit into from
Aug 31, 2023
Merged

Fix Protocol Liquidation Fee calculation #313

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Binary file modified contracts/red-bank/tests/files/Red Bank - Dynamic LB & CF test cases v1.1.xlsx
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17 changes: 8 additions & 9 deletions contracts/red-bank/tests/tests/test_liquidate.rs
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Original file line number Diff line number Diff line change
Expand Up @@ -226,15 +226,15 @@ fn target_health_factor_reached_after_max_debt_repayed() {
// check liquidator positions
let liquidator_collaterals = red_bank.query_user_collaterals(&mut mock_env, &liquidator);
assert_eq!(liquidator_collaterals.len(), 1);
assert_eq!(liquidator_collaterals.get("uosmo").unwrap().amount.u128(), 7180);
assert_eq!(liquidator_collaterals.get("uosmo").unwrap().amount.u128(), 7182);
let liquidator_debts = red_bank.query_user_debts(&mut mock_env, &liquidator);
assert_eq!(liquidator_debts.len(), 0);

// check rewards-collector positions (protocol fee)
let rc_collaterals =
red_bank.query_user_collaterals(&mut mock_env, &rewards_collector.contract_addr);
assert_eq!(rc_collaterals.len(), 1);
assert_eq!(rc_collaterals.get("uosmo").unwrap().amount.u128(), 11);
assert_eq!(rc_collaterals.get("uosmo").unwrap().amount.u128(), 9);
let rc_debts = red_bank.query_user_debts(&mut mock_env, &rewards_collector.contract_addr);
assert_eq!(rc_debts.len(), 0);

Expand Down Expand Up @@ -316,15 +316,15 @@ fn debt_amt_adjusted_to_total_debt_then_refund() {
// check liquidator positions
let liquidator_collaterals = red_bank.query_user_collaterals(&mut mock_env, &liquidator);
assert_eq!(liquidator_collaterals.len(), 1);
assert_eq!(liquidator_collaterals.get("uosmo").unwrap().amount.u128(), 9946);
assert_eq!(liquidator_collaterals.get("uosmo").unwrap().amount.u128(), 9948);
let liquidator_debts = red_bank.query_user_debts(&mut mock_env, &liquidator);
assert_eq!(liquidator_debts.len(), 0);

// check rewards-collector positions (protocol fee)
let rc_collaterals =
red_bank.query_user_collaterals(&mut mock_env, &rewards_collector.contract_addr);
assert_eq!(rc_collaterals.len(), 1);
assert_eq!(rc_collaterals.get("uosmo").unwrap().amount.u128(), 20);
assert_eq!(rc_collaterals.get("uosmo").unwrap().amount.u128(), 18);
let rc_debts = red_bank.query_user_debts(&mut mock_env, &rewards_collector.contract_addr);
assert_eq!(rc_debts.len(), 0);

Expand Down Expand Up @@ -405,15 +405,15 @@ fn debt_amt_adjusted_to_max_allowed_by_requested_coin() {
// check liquidator positions
let liquidator_collaterals = red_bank.query_user_collaterals(&mut mock_env, &liquidator);
assert_eq!(liquidator_collaterals.len(), 1);
assert_eq!(liquidator_collaterals.get("uosmo").unwrap().amount.u128(), 9976);
assert_eq!(liquidator_collaterals.get("uosmo").unwrap().amount.u128(), 9978);
let liquidator_debts = red_bank.query_user_debts(&mut mock_env, &liquidator);
assert_eq!(liquidator_debts.len(), 0);

// check rewards-collector positions (protocol fee)
let rc_collaterals =
red_bank.query_user_collaterals(&mut mock_env, &rewards_collector.contract_addr);
assert_eq!(rc_collaterals.len(), 1);
assert_eq!(rc_collaterals.get("uosmo").unwrap().amount.u128(), 20);
assert_eq!(rc_collaterals.get("uosmo").unwrap().amount.u128(), 18);
let rc_debts = red_bank.query_user_debts(&mut mock_env, &rewards_collector.contract_addr);
assert_eq!(rc_debts.len(), 0);

Expand Down Expand Up @@ -501,15 +501,14 @@ fn debt_amt_no_adjustment_with_different_recipient() {
// check recipient positions
let recipient_collaterals = red_bank.query_user_collaterals(&mut mock_env, &recipient);
assert_eq!(recipient_collaterals.len(), 1);
assert_eq!(recipient_collaterals.get("uosmo").unwrap().amount.u128(), 406);
assert_eq!(recipient_collaterals.get("uosmo").unwrap().amount.u128(), 407);
let recipient_debts = red_bank.query_user_debts(&mut mock_env, &recipient);
assert_eq!(recipient_debts.len(), 0);

// check rewards-collector positions (protocol fee)
let rc_collaterals =
red_bank.query_user_collaterals(&mut mock_env, &rewards_collector.contract_addr);
assert_eq!(rc_collaterals.len(), 1);
assert_eq!(rc_collaterals.get("uosmo").unwrap().amount.u128(), 1);
assert_eq!(rc_collaterals.len(), 0);
let rc_debts = red_bank.query_user_debts(&mut mock_env, &rewards_collector.contract_addr);
assert_eq!(rc_debts.len(), 0);

Expand Down
12 changes: 7 additions & 5 deletions packages/liquidation/src/liquidation.rs
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Original file line number Diff line number Diff line change
Expand Up @@ -79,8 +79,9 @@ pub fn calculate_liquidation_amounts(
.min()
.ok_or_else(|| StdError::generic_err("Minimum not found"))?;

let collateral_amount_to_liquidate = debt_amount_to_repay
.checked_mul_floor(debt_price)?
let debt_value_to_repay = debt_amount_to_repay.checked_mul_floor(debt_price)?;

let collateral_amount_to_liquidate = debt_value_to_repay
.checked_mul_floor(liquidation_bonus.add(Decimal::one()))?
.checked_div_floor(collateral_price)?;

Expand All @@ -97,11 +98,12 @@ pub fn calculate_liquidation_amounts(
)));
}

let lb_amount = collateral_amount_to_liquidate.checked_mul_floor(liquidation_bonus)?;
let lb_value = debt_value_to_repay.checked_mul_floor(liquidation_bonus)?;

// Use ceiling in favour of protocol
let protocol_fee_amount =
lb_amount.checked_mul_ceil(collateral_params.protocol_liquidation_fee)?;
let protocol_fee_value =
lb_value.checked_mul_ceil(collateral_params.protocol_liquidation_fee)?;
let protocol_fee_amount = protocol_fee_value.checked_div_floor(collateral_price)?;

let collateral_amount_received_by_liquidator =
collateral_amount_to_liquidate - protocol_fee_amount;
Expand Down