Merge pull request #82 from morpho-org/doc/readme

doc: readme parameter restriction

README.md

@@ -36,6 +36,17 @@ The two main use-cases are:
 1. Using normal fixed parameters when `preLIF1 = preLIF2` and `preLCF1 = preLCF2`.
 2. Using health dependent liquidation when either `preLIF1 < preLIF2` or `preLCF1 < preLCF2`, similar to a Quasi Dutch Auction (as in [Euler liquidations](https://docs-v1.euler.finance/getting-started/white-paper#liquidations)).
 
+
+### Pre-liquidation parameters restrictions
+
+The PreLiquidation smart-contract enforces the following properties:
+- preLltv < LLTV;
+- preLCF1 <= preLCF2;
+- preLFC1 <= 1;
+- 1 <= preLIF1 <= preLIF2 <= 1 / LLTV.
+Note: Using `preLCF2 > 1`, you can select at which LTV between preLltv and LLTV the entire position will be pre-liquidated.
+A pre-liquidation close factor higher than 100% means that the whole position is pre-liquidatable.
+
 ### `onPreLiquidate` callback
 
 By calling `preLiquidate` with a smart contract that implements the `IPreLiquidationCallback` interface, the liquidator can be called back.

src/PreLiquidation.sol

@@ -79,12 +79,14 @@ contract PreLiquidation is IPreLiquidation, IMorphoRepayCallback {
     /// @dev The following requirements should be met:
     /// - preLltv < LLTV;
     /// - preLCF1 <= preLCF2;
+    /// - preLCF1 <= 1
     /// - 1 <= preLIF1 <= preLIF2 <= 1 / LLTV.
     constructor(address morpho, Id id, PreLiquidationParams memory _preLiquidationParams) {
         require(IMorpho(morpho).market(id).lastUpdate != 0, ErrorsLib.NonexistentMarket());
         MarketParams memory _marketParams = IMorpho(morpho).idToMarketParams(id);
         require(_preLiquidationParams.preLltv < _marketParams.lltv, ErrorsLib.PreLltvTooHigh());
         require(_preLiquidationParams.preLCF1 <= _preLiquidationParams.preLCF2, ErrorsLib.PreLCFDecreasing());
+        require(_preLiquidationParams.preLCF1 <= WAD, ErrorsLib.PreLCFTooHigh());
         require(WAD <= _preLiquidationParams.preLIF1, ErrorsLib.PreLIFTooLow());
         require(_preLiquidationParams.preLIF1 <= _preLiquidationParams.preLIF2, ErrorsLib.PreLIFDecreasing());
         require(_preLiquidationParams.preLIF2 <= WAD.wDivDown(_marketParams.lltv), ErrorsLib.PreLIFTooHigh());

src/libraries/ErrorsLib.sol

@@ -12,6 +12,8 @@ library ErrorsLib {
 
     error PreLCFDecreasing();
 
+    error PreLCFTooHigh();
+
     error PreLIFTooLow();
 
     error PreLIFDecreasing();

test/PreLiquidationErrorTest.sol

@@ -40,7 +40,7 @@ contract PreLiquidationErrorTest is BaseTest {
         factory.createPreLiquidation(id, preLiquidationParams);
     }
 
-    function testCloseFactorDecreasing(PreLiquidationParams memory preLiquidationParams) public virtual {
+    function testLCFDecreasing(PreLiquidationParams memory preLiquidationParams) public virtual {
         preLiquidationParams = boundPreLiquidationParameters({
             preLiquidationParams: preLiquidationParams,
             minPreLltv: WAD / 100,
@@ -57,6 +57,22 @@ contract PreLiquidationErrorTest is BaseTest {
         factory.createPreLiquidation(id, preLiquidationParams);
     }
 
+    function testLCFHigh(PreLiquidationParams memory preLiquidationParams) public virtual {
+        preLiquidationParams = boundPreLiquidationParameters({
+            preLiquidationParams: preLiquidationParams,
+            minPreLltv: WAD / 100,
+            maxPreLltv: marketParams.lltv - 1,
+            minPreLCF: WAD + 1,
+            maxPreLCF: type(uint256).max,
+            minPreLIF: WAD + 1,
+            maxPreLIF: WAD.wDivDown(lltv),
+            preLiqOracle: marketParams.oracle
+        });
+
+        vm.expectRevert(ErrorsLib.PreLCFTooHigh.selector);
+        factory.createPreLiquidation(id, preLiquidationParams);
+    }
+
     function testLowPreLIF(PreLiquidationParams memory preLiquidationParams) public virtual {
         preLiquidationParams = boundPreLiquidationParameters({
             preLiquidationParams: preLiquidationParams,