From 37611b3569f64c1bfe26c6e0f4a76d849623018e Mon Sep 17 00:00:00 2001
From: piobab <piobab0x@proton.me>
Date: Thu, 20 Jun 2024 15:06:54 +0200
Subject: [PATCH] Fix Oak no. 1 - liquidatees staking rewards.

---
 .../credit-manager/src/liquidate_astro_lp.rs   |  9 +++++++++
 .../tests/test_liquidate_staked_astro_lp.rs    | 18 +++++++++++++++---
 2 files changed, 24 insertions(+), 3 deletions(-)

diff --git a/contracts/credit-manager/src/liquidate_astro_lp.rs b/contracts/credit-manager/src/liquidate_astro_lp.rs
index 4c600139..fce60c01 100644
--- a/contracts/credit-manager/src/liquidate_astro_lp.rs
+++ b/contracts/credit-manager/src/liquidate_astro_lp.rs
@@ -38,6 +38,15 @@ pub fn liquidate_astro_lp(
         total_lp_amount,
     )?;
 
+    // Rewards are not accounted for in the liquidation calculation (health computer includes
+    // only staked astro lps in HF calculation).
+    // Rewards could increase the HF (they increase deposit balance - collateral), but the impact
+    // is minimal and additional complexity is not worth it.
+    // We only update liquidatee's balance with rewards.
+    for reward in lp_position.rewards.iter() {
+        increment_coin_balance(deps.storage, liquidatee_account_id, reward)?;
+    }
+
     // Liquidator pays down debt on behalf of liquidatee
     let repay_msg =
         repay_debt(deps.storage, &env, liquidator_account_id, liquidatee_account_id, &debt)?;
diff --git a/contracts/credit-manager/tests/tests/test_liquidate_staked_astro_lp.rs b/contracts/credit-manager/tests/tests/test_liquidate_staked_astro_lp.rs
index 3c45ae6d..302b4786 100644
--- a/contracts/credit-manager/tests/tests/test_liquidate_staked_astro_lp.rs
+++ b/contracts/credit-manager/tests/tests/test_liquidate_staked_astro_lp.rs
@@ -1,4 +1,4 @@
-use cosmwasm_std::{coins, Addr, Decimal, Uint128};
+use cosmwasm_std::{coin, coins, Addr, Decimal, Uint128};
 use mars_credit_manager::error::{ContractError, ContractError::NotLiquidatable};
 use mars_mock_oracle::msg::CoinPrice;
 use mars_testing::multitest::helpers::coin_info;
@@ -203,6 +203,16 @@ fn staked_lp_position_partially_liquidated() {
     )
     .unwrap();
 
+    // Add rewards
+    let astro_reward = coin(54, "uastro");
+    let atom_reward = coin(4, "uatom");
+    mock.add_astro_incentive_reward(
+        &liquidatee_account_id,
+        &uosmo_info.denom,
+        astro_reward.clone(),
+    );
+    mock.add_astro_incentive_reward(&liquidatee_account_id, &uosmo_info.denom, atom_reward.clone());
+
     mock.price_change(CoinPrice {
         pricing: ActionKind::Liquidation,
         denom: uatom_info.denom.clone(),
@@ -234,11 +244,13 @@ fn staked_lp_position_partially_liquidated() {
 
     // Assert liquidatee's new position
     let position = mock.query_positions(&liquidatee_account_id);
-    assert_eq!(position.deposits.len(), 2);
+    assert_eq!(position.deposits.len(), 3);
     let osmo_balance = get_coin("uosmo", &position.deposits);
     assert_eq!(osmo_balance.amount, Uint128::new(600));
     let atom_balance = get_coin("uatom", &position.deposits);
-    assert_eq!(atom_balance.amount, Uint128::new(1000));
+    assert_eq!(atom_balance.amount, Uint128::new(1000) + atom_reward.amount);
+    let astro_balance = get_coin(&astro_reward.denom, &position.deposits);
+    assert_eq!(astro_balance.amount, astro_reward.amount);
 
     assert_eq!(position.debts.len(), 1);
     let atom_debt = get_debt("uatom", &position.debts);