0g-chain/x/cdp/keeper/seize.go

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 := sdk.ZeroInt()
	for _, pc := range cdp.Principal {
		debt = debt.Add(pc.Amount)
	}
	for _, dc := range cdp.AccumulatedFees {
		debt = debt.Add(dc.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, dep.Amount)
		if err != nil {
			return err
		}
		k.DeleteDeposit(ctx, dep.CdpID, dep.Depositor)
	}
	err = k.AuctionCollateral(ctx, deposits, debt, cdp.Principal[0].Denom)
	if err != nil {
		return err
	}

	// Decrement total principal for this collateral type
	for _, dc := range cdp.Principal {
		feeAmount := cdp.AccumulatedFees.AmountOf(dc.Denom)
		coinsToDecrement := sdk.NewCoins(dc)
		if feeAmount.IsPositive() {
			feeCoins := sdk.NewCoins(sdk.NewCoin(dc.Denom, feeAmount))
			coinsToDecrement = coinsToDecrement.Add(feeCoins...)
		}
		k.DecrementTotalPrincipal(ctx, cdp.Collateral[0].Denom, coinsToDecrement)
	}
	k.RemoveCdpOwnerIndex(ctx, cdp)
	k.RemoveCdpCollateralRatioIndex(ctx, cdp.Collateral[0].Denom, cdp.ID, oldCollateralToDebtRatio)
	k.DeleteCDP(ctx, cdp)
	return nil
}

// 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))
}