style: better naming and internalize computation

morpho-org · Aug 10, 2023 · de861cd · de861cd
1 parent a5d2a0f
commit de861cd
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Showing 3 changed files with 24 additions and 10 deletions.
diff --git a/src/Blue.sol b/src/Blue.sol
@@ -16,8 +16,10 @@ import {SafeTransferLib} from "./libraries/SafeTransferLib.sol";
 import {FixedPointMathLib, WAD} from "./libraries/FixedPointMathLib.sol";
 
 uint256 constant MAX_FEE = 0.25e18;
-uint256 constant BETA = 0.3e18;
-uint256 constant MAX_INCENTIVE = 0.15e18;
+// Liquidation cursor.
+uint256 constant LIQUIDATION_CURSOR = 0.3e18;
+// Max liquidation scalar (1 + maxLiquidationIncentive).
+uint256 constant MAX_LIQUIDATION_SCALAR = 1.15e18;
 
 /// @dev The EIP-712 typeHash for EIP712Domain.
 bytes32 constant DOMAIN_TYPEHASH = keccak256("EIP712Domain(string name,uint256 chainId,address verifyingContract)");
@@ -295,9 +297,7 @@ contract Blue is IBlue {
 
         require(!_isHealthy(market, id, borrower, collateralPrice, priceScale), ErrorsLib.HEALTHY_POSITION);
 
-        // The liquidation incentive is min(MAX_INCENTIVE, 1/(BETA * lltv + 1 - BETA) - 1).
-        uint256 incentive = UtilsLib.min(MAX_INCENTIVE, WAD.wDivDown(BETA.wMulDown(market.lltv) + WAD - BETA) - WAD);
-        uint256 repaid = seized.mulDivUp(collateralPrice, priceScale).wDivUp(WAD + incentive);
+        uint256 repaid = seized.mulDivUp(collateralPrice, priceScale).wDivUp(liquidationScalar(market.lltv));
         uint256 repaidShares = repaid.toSharesDown(totalBorrow[id], totalBorrowShares[id]);
 
         borrowShares[id][borrower] -= repaidShares;
@@ -442,4 +442,14 @@ contract Blue is IBlue {
             }
         }
     }
+
+    // Liquidation scalar.
+
+    /// @dev The liquidation incentive is min(maxIncentive, 1/(cursor * lltv + 1 - cursor) - 1).
+    /// @dev The liquidation scalar is 1 + incentive.
+    function liquidationScalar(uint256 lltv) private pure returns (uint256) {
+        return UtilsLib.min(
+            MAX_LIQUIDATION_SCALAR, WAD.wDivDown(LIQUIDATION_CURSOR.wMulDown(lltv) + WAD - LIQUIDATION_CURSOR)
+        );
+    }
 }
diff --git a/test/forge/Blue.t.sol b/test/forge/Blue.t.sol
@@ -616,7 +616,9 @@ contract BlueTest is
         uint256 borrowingPower = amountCollateral.wMulDown(LLTV);
         uint256 amountBorrowed = borrowingPower.wMulDown(0.8e18);
         uint256 toSeize = amountCollateral.wMulDown(LLTV);
-        uint256 incentive = UtilsLib.min(MAX_INCENTIVE, WAD.wDivDown(BETA.wMulDown(market.lltv) + WAD - BETA) - WAD);
+        uint256 liquidationScalar = UtilsLib.min(
+            MAX_LIQUIDATION_SCALAR, WAD.wDivDown(LIQUIDATION_CURSOR.wMulDown(market.lltv) + WAD - LIQUIDATION_CURSOR)
+        );
 
         borrowableAsset.setBalance(address(this), amountLent);
         collateralAsset.setBalance(BORROWER, amountCollateral);
@@ -643,7 +645,7 @@ contract BlueTest is
         uint256 liquidatorNetWorthAfter = netWorth(LIQUIDATOR);
         (uint256 collateralPrice, uint256 priceScale) = IOracle(market.oracle).price();
 
-        uint256 expectedRepaid = toSeize.mulDivUp(collateralPrice, priceScale).wDivUp(WAD + incentive);
+        uint256 expectedRepaid = toSeize.mulDivUp(collateralPrice, priceScale).wDivUp(liquidationScalar);
         uint256 expectedNetWorthAfter =
             liquidatorNetWorthBefore + toSeize.mulDivDown(collateralPrice, priceScale) - expectedRepaid;
         assertEq(liquidatorNetWorthAfter, expectedNetWorthAfter, "LIQUIDATOR net worth");
@@ -659,7 +661,9 @@ contract BlueTest is
         uint256 borrowingPower = amountCollateral.wMulDown(LLTV);
         uint256 amountBorrowed = borrowingPower.wMulDown(0.8e18);
         uint256 toSeize = amountCollateral;
-        uint256 incentive = UtilsLib.min(MAX_INCENTIVE, WAD.wDivDown(BETA.wMulDown(market.lltv) + WAD - BETA) - WAD);
+        uint256 liquidationScalar = UtilsLib.min(
+            MAX_LIQUIDATION_SCALAR, WAD.wDivDown(LIQUIDATION_CURSOR.wMulDown(market.lltv) + WAD - LIQUIDATION_CURSOR)
+        );
 
         borrowableAsset.setBalance(address(this), amountLent);
         collateralAsset.setBalance(BORROWER, amountCollateral);
@@ -686,7 +690,7 @@ contract BlueTest is
         uint256 liquidatorNetWorthAfter = netWorth(LIQUIDATOR);
         (uint256 collateralPrice, uint256 priceScale) = IOracle(market.oracle).price();
 
-        uint256 expectedRepaid = toSeize.mulDivUp(collateralPrice, priceScale).wDivUp(WAD + incentive);
+        uint256 expectedRepaid = toSeize.mulDivUp(collateralPrice, priceScale).wDivUp(liquidationScalar);
         uint256 expectedNetWorthAfter =
             liquidatorNetWorthBefore + toSeize.mulDivDown(collateralPrice, priceScale) - expectedRepaid;
         assertEq(liquidatorNetWorthAfter, expectedNetWorthAfter, "LIQUIDATOR net worth");

diff --git a/test/hardhat/Blue.spec.ts b/test/hardhat/Blue.spec.ts
@@ -175,7 +175,7 @@ describe("Blue", () => {
 
       await oracle.setPrice(BigNumber.WAD.div(10));
 
-      const seized = closePositions ? constants.MaxUint256 : amount.div(2);
+      const seized = closePositions ? amount : amount.div(2);
 
       await blue.connect(liquidator).liquidate(market, borrower.address, seized, "0x");