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Log bad debt assets #637

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merged 4 commits into from
Dec 10, 2023
Merged

Log bad debt assets #637

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4b33eef
feat: log bad debt but require via ir
MerlinEgalite Dec 7, 2023
8d81c38
refactor: no need for via ir anymore
MerlinEgalite Dec 7, 2023
e7bfeea
docs: add missing param
MerlinEgalite Dec 7, 2023
44281bd
docs: apply suggestion
MerlinEgalite Dec 7, 2023
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19 changes: 11 additions & 8 deletions src/Morpho.sol
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Original file line number Diff line number Diff line change
Expand Up @@ -354,12 +354,12 @@ contract Morpho is IMorphoStaticTyping {

_accrueInterest(marketParams, id);

uint256 collateralPrice = IOracle(marketParams.oracle).price();

require(!_isHealthy(marketParams, id, borrower, collateralPrice), ErrorsLib.HEALTHY_POSITION);

uint256 repaidAssets;
{
uint256 collateralPrice = IOracle(marketParams.oracle).price();

require(!_isHealthy(marketParams, id, borrower, collateralPrice), ErrorsLib.HEALTHY_POSITION);

// The liquidation incentive factor is min(maxLiquidationIncentiveFactor, 1/(1 - cursor*(1 - lltv))).
uint256 liquidationIncentiveFactor = UtilsLib.min(
MAX_LIQUIDATION_INCENTIVE_FACTOR,
Expand All @@ -384,23 +384,26 @@ contract Morpho is IMorphoStaticTyping {
position[id][borrower].collateral -= seizedAssets.toUint128();

uint256 badDebtShares;
uint256 badDebtAssets;
if (position[id][borrower].collateral == 0) {
badDebtShares = position[id][borrower].borrowShares;
uint256 badDebt = UtilsLib.min(
badDebtAssets = UtilsLib.min(
market[id].totalBorrowAssets,
badDebtShares.toAssetsUp(market[id].totalBorrowAssets, market[id].totalBorrowShares)
);

market[id].totalBorrowAssets -= badDebt.toUint128();
market[id].totalSupplyAssets -= badDebt.toUint128();
market[id].totalBorrowAssets -= badDebtAssets.toUint128();
market[id].totalSupplyAssets -= badDebtAssets.toUint128();
market[id].totalBorrowShares -= badDebtShares.toUint128();
position[id][borrower].borrowShares = 0;
}

IERC20(marketParams.collateralToken).safeTransfer(msg.sender, seizedAssets);

// `repaidAssets` may be greater than `totalBorrowAssets` by 1.
emit EventsLib.Liquidate(id, msg.sender, borrower, repaidAssets, repaidShares, seizedAssets, badDebtShares);
emit EventsLib.Liquidate(
id, msg.sender, borrower, repaidAssets, repaidShares, seizedAssets, badDebtAssets, badDebtShares
);

if (data.length > 0) IMorphoLiquidateCallback(msg.sender).onMorphoLiquidate(repaidAssets, data);

Expand Down
4 changes: 3 additions & 1 deletion src/libraries/EventsLib.sol
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Expand Up @@ -106,14 +106,16 @@ library EventsLib {
/// @param repaidAssets The amount of assets repaid. May be 1 over the corresponding market's `totalBorrowAssets`.
/// @param repaidShares The amount of shares burned.
/// @param seizedAssets The amount of collateral seized.
/// @param badDebtShares The amount of shares minted as bad debt.
/// @param badDebtAssets The amount of assets of bad debt realized.
/// @param badDebtShares The amount of borrow shares of bad debt realized.
event Liquidate(
Id indexed id,
address indexed caller,
address indexed borrower,
uint256 repaidAssets,
uint256 repaidShares,
uint256 seizedAssets,
uint256 badDebtAssets,
uint256 badDebtShares
);

Expand Down
5 changes: 3 additions & 2 deletions test/forge/integration/LiquidateIntegrationTest.sol
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Expand Up @@ -154,7 +154,7 @@ contract LiquidateIntegrationTest is BaseTest {
vm.prank(LIQUIDATOR);

vm.expectEmit(true, true, true, true, address(morpho));
emit EventsLib.Liquidate(id, LIQUIDATOR, BORROWER, expectedRepaid, expectedRepaidShares, amountSeized, 0);
emit EventsLib.Liquidate(id, LIQUIDATOR, BORROWER, expectedRepaid, expectedRepaidShares, amountSeized, 0, 0);
(uint256 returnSeized, uint256 returnRepaid) = morpho.liquidate(marketParams, BORROWER, amountSeized, 0, hex"");

uint256 expectedCollateral = params.amountCollateral - amountSeized;
Expand Down Expand Up @@ -214,7 +214,7 @@ contract LiquidateIntegrationTest is BaseTest {
vm.prank(LIQUIDATOR);

vm.expectEmit(true, true, true, true, address(morpho));
emit EventsLib.Liquidate(id, LIQUIDATOR, BORROWER, expectedRepaid, sharesRepaid, expectedSeized, 0);
emit EventsLib.Liquidate(id, LIQUIDATOR, BORROWER, expectedRepaid, sharesRepaid, expectedSeized, 0, 0);
(uint256 returnSeized, uint256 returnRepaid) = morpho.liquidate(marketParams, BORROWER, 0, sharesRepaid, hex"");

uint256 expectedCollateral = params.amountCollateral - expectedSeized;
Expand Down Expand Up @@ -303,6 +303,7 @@ contract LiquidateIntegrationTest is BaseTest {
params.expectedRepaid,
params.expectedRepaidShares,
amountCollateral,
params.expectedBadDebt,
params.expectedBadDebt * SharesMathLib.VIRTUAL_SHARES
);
(uint256 returnSeized, uint256 returnRepaid) =
Expand Down
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