fix(perp): Liquidate calls proper Liquidation method (#676)

* Fix liquidate to select partial liquidations correctly Also changed interface to not accept msg, and have msgServer break down the msg proto * Add Liquidate unit test * Refactor liquidate unit test * Add full liquidation test * Formatting * Refactor tests * Bump cosmos-sdk to v0.45.6 * Change badDebt to sdk.Int * Add full liquidation tests with bad debt * Bump go version to 1.18 * Bump workflows to 1.18 Co-authored-by: Mat-Cosmos <[email protected]>
NibiruChain · Jul 7, 2022 · cca45e4 · cca45e4
1 parent 060ab8f
commit cca45e4
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Showing 7 changed files with 720 additions and 203 deletions.
diff --git a/proto/perp/v1/state.proto b/proto/perp/v1/state.proto
@@ -172,7 +172,7 @@ message PositionResp {
 message LiquidateResp {
   // Amount of bad debt created by the liquidation event
   string bad_debt = 1 [
-    (gogoproto.customtype) = "github.com/cosmos/cosmos-sdk/types.Dec",
+    (gogoproto.customtype) = "github.com/cosmos/cosmos-sdk/types.Int",
     (gogoproto.nullable) = false];
 
   // Fee paid to the liquidator

diff --git a/x/perp/keeper/liquidate.go b/x/perp/keeper/liquidate.go
@@ -1,8 +1,6 @@
 package keeper
 
 import (
-	"context"
-
 	sdk "github.com/cosmos/cosmos-sdk/types"
 
 	"github.com/NibiruChain/nibiru/x/common"
@@ -12,51 +10,47 @@ import (
 
 /* Liquidate allows to liquidate the trader position if the margin is below the
 required margin maintenance ratio.
-*/
-func (k Keeper) Liquidate(
-	goCtx context.Context, msg *types.MsgLiquidate,
-) (res *types.MsgLiquidateResponse, err error) {
-	// ------------- Liquidation Message Setup -------------
-
-	ctx := sdk.UnwrapSDKContext(goCtx)
-
-	// validate liquidator (msg.Sender)
-	liquidatorAddr, err := sdk.AccAddressFromBech32(msg.Sender)
-	if err != nil {
-		return res, err
-	}
 
-	// validate trader (msg.PositionOwner)
-	traderAddr, err := sdk.AccAddressFromBech32(msg.Trader)
-	if err != nil {
-		return res, err
-	}
+args:
+  - liquidatorAddr: the liquidator who is executing the liquidation
+  - pair: the asset pair
+  - traderAddr: the trader who owns the position being liquidated
 
-	// validate pair
-	pair, err := common.NewAssetPair(msg.TokenPair)
-	if err != nil {
-		return res, err
-	}
+ret:
+  - feeToLiquidator: the amount of coins given to the liquidator
+  - feeToFund: the amount of coins given to the ecosystem fund
+  - err: error
+*/
+func (k Keeper) Liquidate(
+	ctx sdk.Context,
+	liquidatorAddr sdk.AccAddress,
+	pair common.AssetPair,
+	traderAddr sdk.AccAddress,
+) (feeToLiquidator sdk.Coin, feeToFund sdk.Coin, err error) {
 	err = k.requireVpool(ctx, pair)
 	if err != nil {
-		return res, err
+		return sdk.Coin{}, sdk.Coin{}, err
 	}
 
 	position, err := k.GetPosition(ctx, pair, traderAddr)
 	if err != nil {
-		return res, err
+		return sdk.Coin{}, sdk.Coin{}, err
 	}
 
-	marginRatio, err := k.GetMarginRatio(ctx, *position, types.MarginCalculationPriceOption_MAX_PNL)
+	marginRatio, err := k.GetMarginRatio(
+		ctx,
+		*position,
+		types.MarginCalculationPriceOption_MAX_PNL,
+	)
 	if err != nil {
-		return res, err
+		return sdk.Coin{}, sdk.Coin{}, err
 	}
 
 	if k.VpoolKeeper.IsOverSpreadLimit(ctx, pair) {
 		marginRatioBasedOnOracle, err := k.GetMarginRatio(
 			ctx, *position, types.MarginCalculationPriceOption_INDEX)
 		if err != nil {
-			return res, err
+			return sdk.Coin{}, sdk.Coin{}, err
 		}
 
 		marginRatio = sdk.MaxDec(marginRatio, marginRatioBasedOnOracle)
@@ -65,39 +59,36 @@ func (k Keeper) Liquidate(
 	params := k.GetParams(ctx)
 	err = requireMoreMarginRatio(marginRatio, params.MaintenanceMarginRatio, false)
 	if err != nil {
-		return res, types.ErrMarginHighEnough
+		return sdk.Coin{}, sdk.Coin{}, types.ErrMarginHighEnough
 	}
 
 	marginRatioBasedOnSpot, err := k.GetMarginRatio(
 		ctx, *position, types.MarginCalculationPriceOption_SPOT)
 	if err != nil {
-		return res, err
+		return sdk.Coin{}, sdk.Coin{}, err
 	}
 
 	var liquidationResponse types.LiquidateResp
-	if marginRatioBasedOnSpot.GTE(params.PartialLiquidationRatio) {
-		liquidationResponse, err = k.ExecuteFullLiquidation(ctx, liquidatorAddr, position)
-	} else {
+	if marginRatioBasedOnSpot.GTE(params.LiquidationFeeRatio) {
 		liquidationResponse, err = k.ExecutePartialLiquidation(ctx, liquidatorAddr, position)
+	} else {
+		liquidationResponse, err = k.ExecuteFullLiquidation(ctx, liquidatorAddr, position)
 	}
 	if err != nil {
-		return res, err
+		return sdk.Coin{}, sdk.Coin{}, err
 	}
 
-	feeToLiquidator := sdk.NewCoin(
+	feeToLiquidator = sdk.NewCoin(
 		pair.GetQuoteTokenDenom(),
 		liquidationResponse.FeeToLiquidator,
 	)
 
-	feeToEcosystemFund := sdk.NewCoin(
+	feeToFund = sdk.NewCoin(
 		pair.GetQuoteTokenDenom(),
 		liquidationResponse.FeeToPerpEcosystemFund,
 	)
 
-	return &types.MsgLiquidateResponse{
-		FeeToLiquidator:        feeToLiquidator,
-		FeeToPerpEcosystemFund: feeToEcosystemFund,
-	}, nil
+	return feeToLiquidator, feeToFund, nil
 }
 
 /*
@@ -143,7 +134,7 @@ func (k Keeper) ExecuteFullLiquidation(
 		totalBadDebt = totalBadDebt.Add(feeToLiquidator.Sub(remainMargin))
 		remainMargin = sdk.ZeroDec()
 	} else {
-		// Otherwise, the remaining margin rest will be transferred to ecosystemFund
+		// Otherwise, the remaining margin will be transferred to ecosystemFund
 		remainMargin = remainMargin.Sub(feeToLiquidator)
 	}
 
@@ -164,7 +155,7 @@ func (k Keeper) ExecuteFullLiquidation(
 	}
 
 	liquidationResp = types.LiquidateResp{
-		BadDebt:                totalBadDebt,
+		BadDebt:                totalBadDebt.RoundInt(),
 		FeeToLiquidator:        feeToLiquidator.RoundInt(),
 		FeeToPerpEcosystemFund: feeToPerpEcosystemFund.RoundInt(),
 		Liquidator:             liquidator.String(),
@@ -244,7 +235,7 @@ func (k Keeper) distributeLiquidateRewards(
 		}
 	}
 
-	// Transfer fee from PerpEF to liquidator
+	// Transfer fee from vault to liquidator
 	feeToLiquidator := liquidateResp.FeeToLiquidator
 	if feeToLiquidator.IsPositive() {
 		err = k.Withdraw(ctx, pair.GetQuoteTokenDenom(), liquidator, feeToLiquidator)
@@ -309,7 +300,7 @@ func (k Keeper) ExecutePartialLiquidation(
 	feeToPerpEcosystemFund := liquidationFeeAmount.Sub(feeToLiquidator)
 
 	liquidationResponse := types.LiquidateResp{
-		BadDebt:                sdk.ZeroDec(),
+		BadDebt:                sdk.ZeroInt(),
 		FeeToLiquidator:        feeToLiquidator.RoundInt(),
 		FeeToPerpEcosystemFund: feeToPerpEcosystemFund.RoundInt(),
 		Liquidator:             liquidator.String(),
@@ -333,7 +324,7 @@ func (k Keeper) ExecutePartialLiquidation(
 		LiquidatorAddress:     liquidator.String(),
 		FeeToLiquidator:       sdk.NewCoin(currentPosition.Pair.GetQuoteTokenDenom(), feeToLiquidator.RoundInt()),
 		FeeToEcosystemFund:    sdk.NewCoin(currentPosition.Pair.GetQuoteTokenDenom(), feeToPerpEcosystemFund.RoundInt()),
-		BadDebt:               liquidationResponse.BadDebt,
+		BadDebt:               liquidationResponse.BadDebt.ToDec(),
 		Margin:                sdk.NewCoin(currentPosition.Pair.GetQuoteTokenDenom(), liquidationResponse.PositionResp.Position.Margin.RoundInt()),
 		PositionNotional:      liquidationResponse.PositionResp.PositionNotional,
 		PositionSize:          liquidationResponse.PositionResp.Position.Size_,

diff --git a/x/perp/keeper/liquidate_test.go b/x/perp/keeper/liquidate_test.go
@@ -286,7 +286,7 @@ func TestExecuteFullLiquidation(t *testing.T) {
 
 			t.Log("Liquidate the (entire) position")
 			liquidatorAddr := sample.AccAddress()
-			resp, err := nibiruApp.PerpKeeper.ExecuteFullLiquidation(ctx, liquidatorAddr, position)
+			liquidationResp, err := nibiruApp.PerpKeeper.ExecuteFullLiquidation(ctx, liquidatorAddr, position)
 			require.NoError(t, err)
 
 			t.Log("Check correctness of new position")
@@ -311,16 +311,16 @@ func TestExecuteFullLiquidation(t *testing.T) {
 			testutilevents.RequireHasTypedEvent(t, ctx, &types.PositionLiquidatedEvent{
 				Pair:                  tokenPair.String(),
 				TraderAddress:         traderAddr.String(),
-				ExchangedQuoteAmount:  resp.PositionResp.ExchangedNotionalValue,
-				ExchangedPositionSize: resp.PositionResp.ExchangedPositionSize,
+				ExchangedQuoteAmount:  liquidationResp.PositionResp.ExchangedNotionalValue,
+				ExchangedPositionSize: liquidationResp.PositionResp.ExchangedPositionSize,
 				LiquidatorAddress:     liquidatorAddr.String(),
-				FeeToLiquidator:       sdk.NewCoin(tokenPair.GetQuoteTokenDenom(), resp.FeeToLiquidator),
-				FeeToEcosystemFund:    sdk.NewCoin(tokenPair.GetQuoteTokenDenom(), resp.FeeToPerpEcosystemFund),
-				BadDebt:               resp.BadDebt,
+				FeeToLiquidator:       sdk.NewCoin(tokenPair.GetQuoteTokenDenom(), liquidationResp.FeeToLiquidator),
+				FeeToEcosystemFund:    sdk.NewCoin(tokenPair.GetQuoteTokenDenom(), liquidationResp.FeeToPerpEcosystemFund),
+				BadDebt:               liquidationResp.BadDebt.ToDec(),
 				Margin:                sdk.NewCoin(tokenPair.GetQuoteTokenDenom(), sdk.ZeroInt()),
-				PositionNotional:      resp.PositionResp.PositionNotional,
+				PositionNotional:      liquidationResp.PositionResp.PositionNotional,
 				PositionSize:          sdk.ZeroDec(),
-				UnrealizedPnl:         resp.PositionResp.UnrealizedPnlAfter,
+				UnrealizedPnl:         liquidationResp.PositionResp.UnrealizedPnlAfter,
 				MarkPrice:             newMarkPrice,
 				BlockHeight:           ctx.BlockHeight(),
 				BlockTimeMs:           ctx.BlockTime().UnixMilli(),
@@ -564,7 +564,7 @@ func TestExecutePartialLiquidation(t *testing.T) {
 
 			t.Log("Liquidate the (partial) position")
 			liquidator := sample.AccAddress()
-			resp, err := nibiruApp.PerpKeeper.ExecutePartialLiquidation(ctx, liquidator, position)
+			liquidationResp, err := nibiruApp.PerpKeeper.ExecutePartialLiquidation(ctx, liquidator, position)
 			require.NoError(t, err)
 
 			t.Log("Check correctness of new position")
@@ -601,16 +601,16 @@ func TestExecutePartialLiquidation(t *testing.T) {
 			testutilevents.RequireHasTypedEvent(t, ctx, &types.PositionLiquidatedEvent{
 				Pair:                  tokenPair.String(),
 				TraderAddress:         traderAddr.String(),
-				ExchangedQuoteAmount:  resp.PositionResp.ExchangedNotionalValue,
-				ExchangedPositionSize: resp.PositionResp.ExchangedPositionSize,
+				ExchangedQuoteAmount:  liquidationResp.PositionResp.ExchangedNotionalValue,
+				ExchangedPositionSize: liquidationResp.PositionResp.ExchangedPositionSize,
 				LiquidatorAddress:     liquidator.String(),
-				FeeToLiquidator:       sdk.NewCoin(tokenPair.GetQuoteTokenDenom(), resp.FeeToLiquidator),
-				FeeToEcosystemFund:    sdk.NewCoin(tokenPair.GetQuoteTokenDenom(), resp.FeeToPerpEcosystemFund),
-				BadDebt:               resp.BadDebt,
+				FeeToLiquidator:       sdk.NewCoin(tokenPair.GetQuoteTokenDenom(), liquidationResp.FeeToLiquidator),
+				FeeToEcosystemFund:    sdk.NewCoin(tokenPair.GetQuoteTokenDenom(), liquidationResp.FeeToPerpEcosystemFund),
+				BadDebt:               liquidationResp.BadDebt.ToDec(),
 				Margin:                sdk.NewCoin(tokenPair.GetQuoteTokenDenom(), newPosition.Margin.RoundInt()),
-				PositionNotional:      resp.PositionResp.PositionNotional,
+				PositionNotional:      liquidationResp.PositionResp.PositionNotional,
 				PositionSize:          newPosition.Size_,
-				UnrealizedPnl:         resp.PositionResp.UnrealizedPnlAfter,
+				UnrealizedPnl:         liquidationResp.PositionResp.UnrealizedPnlAfter,
 				MarkPrice:             newMarkPrice,
 				BlockHeight:           ctx.BlockHeight(),
 				BlockTimeMs:           ctx.BlockTime().UnixMilli(),