package keeper import ( "fmt" errorsmod "cosmossdk.io/errors" sdkmath "cosmossdk.io/math" sdk "github.com/cosmos/cosmos-sdk/types" "github.com/kava-labs/kava/x/cdp/types" ) // AttemptKeeperLiquidation liquidates the cdp with the input collateral type and owner if it is below the required collateralization ratio // if the cdp is liquidated, the keeper that sent the transaction is rewarded a percentage of the collateral according to that collateral types' // keeper reward percentage. func (k Keeper) AttemptKeeperLiquidation(ctx sdk.Context, keeper, owner sdk.AccAddress, collateralType string) error { cdp, found := k.GetCdpByOwnerAndCollateralType(ctx, owner, collateralType) if !found { return errorsmod.Wrapf(types.ErrCdpNotFound, "owner %s, denom %s", owner, collateralType) } k.hooks.BeforeCDPModified(ctx, cdp) cdp = k.SynchronizeInterest(ctx, cdp) err := k.ValidateLiquidation(ctx, cdp.Collateral, cdp.Type, cdp.Principal, cdp.AccumulatedFees) if err != nil { return err } cdp, err = k.payoutKeeperLiquidationReward(ctx, keeper, cdp) if err != nil { return err } return k.SeizeCollateral(ctx, cdp) } // SeizeCollateral liquidates the collateral in the input cdp. // the following operations are performed: // 1. Collateral for all deposits is sent from the cdp module to the liquidator module account // 2. The liquidation penalty is applied // 3. Debt coins are sent from the cdp module to the liquidator module account // 4. The total amount of principal outstanding for that collateral type is decremented // (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.Type, cdp.GetTotalPrincipal()) // Move debt coins from cdp to liquidator account deposits := k.GetDeposits(ctx, cdp.ID) debt := cdp.GetTotalPrincipal().Amount modAccountDebt := k.getModAccountDebt(ctx, types.ModuleName) debt = sdk.MinInt(debt, modAccountDebt) debtCoin := sdk.NewCoin(k.GetDebtDenom(ctx), debt) err := k.bankKeeper.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 { if err := k.bankKeeper.SendCoinsFromModuleToModule(ctx, types.ModuleName, types.LiquidatorMacc, sdk.NewCoins(dep.Amount)); err != nil { return err } k.DeleteDeposit(ctx, dep.CdpID, dep.Depositor) 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.AttributeKeyDeposit, dep.String()), ), ) } err = k.AuctionCollateral(ctx, deposits, cdp.Type, debt, cdp.Principal.Denom) if err != nil { return err } // Decrement total principal for this collateral type coinsToDecrement := cdp.GetTotalPrincipal() k.DecrementTotalPrincipal(ctx, cdp.Type, coinsToDecrement) // Delete CDP from state k.RemoveCdpOwnerIndex(ctx, cdp) k.RemoveCdpCollateralRatioIndex(ctx, cdp.Type, 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, collateralType string, liquidationRatio sdk.Dec, count sdkmath.Int) 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.GetSliceOfCDPsByRatioAndType(ctx, count, normalizedRatio, collateralType) for _, c := range cdpsToLiquidate { k.hooks.BeforeCDPModified(ctx, c) err := k.SeizeCollateral(ctx, c) if err != nil { return err } } return nil } // ApplyLiquidationPenalty multiplies the input debt amount by the liquidation penalty func (k Keeper) ApplyLiquidationPenalty(ctx sdk.Context, collateralType string, debt sdkmath.Int) sdkmath.Int { penalty := k.getLiquidationPenalty(ctx, collateralType) return sdk.NewDecFromInt(debt).Mul(penalty).RoundInt() } // ValidateLiquidation validate that adding the input principal puts the cdp below the liquidation ratio func (k Keeper) ValidateLiquidation(ctx sdk.Context, collateral sdk.Coin, collateralType string, principal sdk.Coin, fees sdk.Coin) error { collateralizationRatio, err := k.CalculateCollateralizationRatio(ctx, collateral, collateralType, principal, fees, liquidation) if err != nil { return err } liquidationRatio := k.getLiquidationRatio(ctx, collateralType) if collateralizationRatio.GTE(liquidationRatio) { return errorsmod.Wrapf(types.ErrNotLiquidatable, "collateral %s, collateral ratio %s, liquidation ratio %s", collateral.Denom, collateralizationRatio, liquidationRatio) } return nil } func (k Keeper) getModAccountDebt(ctx sdk.Context, accountName string) sdkmath.Int { macc := k.accountKeeper.GetModuleAccount(ctx, accountName) return k.bankKeeper.GetBalance(ctx, macc.GetAddress(), k.GetDebtDenom(ctx)).Amount } func (k Keeper) payoutKeeperLiquidationReward(ctx sdk.Context, keeper sdk.AccAddress, cdp types.CDP) (types.CDP, error) { collateralParam, found := k.GetCollateral(ctx, cdp.Type) if !found { return types.CDP{}, errorsmod.Wrapf(types.ErrInvalidCollateral, "%s", cdp.Type) } reward := sdk.NewDecFromInt(cdp.Collateral.Amount).Mul(collateralParam.KeeperRewardPercentage).RoundInt() rewardCoin := sdk.NewCoin(cdp.Collateral.Denom, reward) paidReward := false deposits := k.GetDeposits(ctx, cdp.ID) for _, dep := range deposits { if dep.Amount.IsGTE(rewardCoin) { dep.Amount = dep.Amount.Sub(rewardCoin) k.SetDeposit(ctx, dep) paidReward = true break } } if !paidReward { return cdp, nil } err := k.bankKeeper.SendCoinsFromModuleToAccount(ctx, types.ModuleName, keeper, sdk.NewCoins(rewardCoin)) if err != nil { return types.CDP{}, err } cdp.Collateral = cdp.Collateral.Sub(rewardCoin) ratio := k.CalculateCollateralToDebtRatio(ctx, cdp.Collateral, cdp.Type, cdp.GetTotalPrincipal()) err = k.UpdateCdpAndCollateralRatioIndex(ctx, cdp, ratio) if err != nil { return types.CDP{}, err } return cdp, nil }