package keeper import ( "fmt" sdk "github.com/cosmos/cosmos-sdk/types" "github.com/kava-labs/kava/x/cdp/types" ) // SeizeCollateral liquidates the collateral in the input cdp. // the following operations are performed: // 1. updates the fees for the input cdp, // 2. sends collateral for all deposits from the cdp module to the liquidator module account // 3. Applies the liquidation penalty and mints the corresponding amount of debt coins in the cdp module // 3. moves debt coins from the cdp module to the liquidator module account, // 4. decrements the total amount of principal outstanding for that collateral type // (this is the equivalent of saying that fees are no longer accumulated by a cdp once it gets liquidated) func (k Keeper) SeizeCollateral(ctx sdk.Context, cdp types.CDP) error { // Calculate the previous collateral ratio oldCollateralToDebtRatio := k.CalculateCollateralToDebtRatio(ctx, cdp.Collateral, cdp.Principal.Add(cdp.AccumulatedFees)) // Move debt coins from cdp to liquidator account deposits := k.GetDeposits(ctx, cdp.ID) debt := cdp.Principal.Amount.Add(cdp.AccumulatedFees.Amount) modAccountDebt := k.getModAccountDebt(ctx, types.ModuleName) if modAccountDebt.LT(debt) { debt = modAccountDebt } debtCoin := sdk.NewCoin(k.GetDebtDenom(ctx), debt) err := k.supplyKeeper.SendCoinsFromModuleToModule(ctx, types.ModuleName, types.LiquidatorMacc, sdk.NewCoins(debtCoin)) if err != nil { return err } // liquidate deposits and send collateral from cdp to liquidator for _, dep := range deposits { ctx.EventManager().EmitEvent( sdk.NewEvent( types.EventTypeCdpLiquidation, sdk.NewAttribute(sdk.AttributeKeyModule, types.AttributeValueCategory), sdk.NewAttribute(types.AttributeKeyCdpID, fmt.Sprintf("%d", cdp.ID)), sdk.NewAttribute(types.AttributeKeyDepositor, fmt.Sprintf("%s", dep.Depositor)), ), ) err := k.supplyKeeper.SendCoinsFromModuleToModule(ctx, types.ModuleName, types.LiquidatorMacc, sdk.NewCoins(dep.Amount)) if err != nil { return err } k.DeleteDeposit(ctx, dep.CdpID, dep.Depositor) } err = k.AuctionCollateral(ctx, deposits, debt, cdp.Principal.Denom) if err != nil { return err } // Decrement total principal for this collateral type coinsToDecrement := cdp.Principal.Add(cdp.AccumulatedFees) k.DecrementTotalPrincipal(ctx, cdp.Collateral.Denom, coinsToDecrement) // Delete CDP from state k.RemoveCdpOwnerIndex(ctx, cdp) k.RemoveCdpCollateralRatioIndex(ctx, cdp.Collateral.Denom, cdp.ID, oldCollateralToDebtRatio) return k.DeleteCDP(ctx, cdp) } // LiquidateCdps seizes collateral from all CDPs below the input liquidation ratio func (k Keeper) LiquidateCdps(ctx sdk.Context, marketID string, denom string, liquidationRatio sdk.Dec) error { price, err := k.pricefeedKeeper.GetCurrentPrice(ctx, marketID) if err != nil { return err } priceDivLiqRatio := price.Price.Quo(liquidationRatio) if priceDivLiqRatio.IsZero() { priceDivLiqRatio = sdk.SmallestDec() } // price = $0.5 // liquidation ratio = 1.5 // normalizedRatio = (1/(0.5/1.5)) = 3 normalizedRatio := sdk.OneDec().Quo(priceDivLiqRatio) cdpsToLiquidate := k.GetAllCdpsByDenomAndRatio(ctx, denom, normalizedRatio) for _, c := range cdpsToLiquidate { err := k.SeizeCollateral(ctx, c) if err != nil { return err } } return nil } // ApplyLiquidationPenalty multiplies the input debt amount by the liquidation penalty and mints the debt coins in the cdp module account func (k Keeper) ApplyLiquidationPenalty(ctx sdk.Context, denom string, debt sdk.Int) sdk.Int { penalty := k.getLiquidationPenalty(ctx, denom) penaltyAmount := sdk.NewDecFromInt(debt).Mul(penalty).RoundInt() return penaltyAmount } func (k Keeper) getModAccountDebt(ctx sdk.Context, accountName string) sdk.Int { macc := k.supplyKeeper.GetModuleAccount(ctx, accountName) return macc.GetCoins().AmountOf(k.GetDebtDenom(ctx)) }