feat: restrict ltv < LLTV

morpho-org · Oct 4, 2024 · e257eed · e257eed
1 parent 8c07dde
commit e257eed
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Showing 5 changed files with 63 additions and 26 deletions.
diff --git a/src/PreLiquidation.sol b/src/PreLiquidation.sol
@@ -146,9 +146,9 @@ contract PreLiquidation is IPreLiquidation, IMorphoRepayCallback {
         // The following require is equivalent to checking that borrowed > collateralQuoted.wMulDown(PRE_LLTV).
         require(ltv > PRE_LLTV, ErrorsLib.NotPreLiquidatablePosition());
 
-        uint256 preLIF = UtilsLib.min(
-            (ltv - PRE_LLTV).wDivDown(LLTV - PRE_LLTV).wMulDown(PRE_LIF_2 - PRE_LIF_1) + PRE_LIF_1, PRE_LIF_2
-        );
+        require(ltv <= LLTV, ErrorsLib.LiquidatablePosition());
+
+        uint256 preLIF = (ltv - PRE_LLTV).wDivDown(LLTV - PRE_LLTV).wMulDown(PRE_LIF_2 - PRE_LIF_1) + PRE_LIF_1;
 
         if (seizedAssets > 0) {
             uint256 seizedAssetsQuoted = seizedAssets.mulDivUp(collateralPrice, ORACLE_PRICE_SCALE);
@@ -163,9 +163,8 @@ contract PreLiquidation is IPreLiquidation, IMorphoRepayCallback {
 
         // Note that the pre-liquidation close factor can be greater than WAD (100%).
         // In this case the position can be fully pre-liquidated.
-        uint256 preLCF = UtilsLib.min(
-            (ltv - PRE_LLTV).wDivDown(LLTV - PRE_LLTV).wMulDown(PRE_LCF_2 - PRE_LCF_1) + PRE_LCF_1, PRE_LCF_2
-        );
+        uint256 preLCF = (ltv - PRE_LLTV).wDivDown(LLTV - PRE_LLTV).wMulDown(PRE_LCF_2 - PRE_LCF_1) + PRE_LCF_1;
+
         uint256 repayableShares = uint256(position.borrowShares).wMulDown(preLCF);
         require(repaidShares <= repayableShares, ErrorsLib.PreLiquidationTooLarge(repaidShares, repayableShares));
 

diff --git a/src/libraries/ErrorsLib.sol b/src/libraries/ErrorsLib.sol
@@ -22,6 +22,8 @@ library ErrorsLib {
 
     error NotPreLiquidatablePosition();
 
+    error LiquidatablePosition();
+
     error PreLiquidationTooLarge(uint256 repaidShares, uint256 repayableShares);
 
     error NotMorpho();

diff --git a/test/BaseTest.sol b/test/BaseTest.sol
@@ -136,21 +136,15 @@ contract BaseTest is Test {
         view
         returns (uint256)
     {
-        return UtilsLib.min(
-            (ltv - preLiquidationParams.preLltv).wDivDown(marketParams.lltv - preLiquidationParams.preLltv).wMulDown(
-                preLiquidationParams.preLCF2 - preLiquidationParams.preLCF1
-            ) + preLiquidationParams.preLCF1,
-            preLiquidationParams.preLCF2
-        );
+        return (ltv - preLiquidationParams.preLltv).wDivDown(marketParams.lltv - preLiquidationParams.preLltv).wMulDown(
+            preLiquidationParams.preLCF2 - preLiquidationParams.preLCF1
+        ) + preLiquidationParams.preLCF1;
     }
 
     function _preLIF(PreLiquidationParams memory preLiquidationParams, uint256 ltv) internal view returns (uint256) {
-        return UtilsLib.min(
-            (ltv - preLiquidationParams.preLltv).wDivDown(marketParams.lltv - preLiquidationParams.preLltv).wMulDown(
-                preLiquidationParams.preLIF2 - preLiquidationParams.preLIF1
-            ) + preLiquidationParams.preLIF1,
-            preLiquidationParams.preLIF2
-        );
+        return (ltv - preLiquidationParams.preLltv).wDivDown(marketParams.lltv - preLiquidationParams.preLltv).wMulDown(
+            preLiquidationParams.preLIF2 - preLiquidationParams.preLIF1
+        ) + preLiquidationParams.preLIF1;
     }
 
     function _getBorrowBounds(

diff --git a/test/PreLiquidationErrorTest.sol b/test/PreLiquidationErrorTest.sol
@@ -36,7 +36,7 @@ contract PreLiquidationErrorTest is BaseTest {
             preLiqOracle: marketParams.oracle
         });
 
-        vm.expectRevert(abi.encodeWithSelector(ErrorsLib.PreLltvTooHigh.selector));
+        vm.expectRevert(ErrorsLib.PreLltvTooHigh.selector);
         factory.createPreLiquidation(id, preLiquidationParams);
     }
 
@@ -53,7 +53,7 @@ contract PreLiquidationErrorTest is BaseTest {
         });
         preLiquidationParams.preLCF2 = bound(preLiquidationParams.preLCF2, 0, preLiquidationParams.preLCF1 - 1);
 
-        vm.expectRevert(abi.encodeWithSelector(ErrorsLib.PreLCFDecreasing.selector));
+        vm.expectRevert(ErrorsLib.PreLCFDecreasing.selector);
         factory.createPreLiquidation(id, preLiquidationParams);
     }
 
@@ -69,7 +69,7 @@ contract PreLiquidationErrorTest is BaseTest {
             preLiqOracle: marketParams.oracle
         });
 
-        vm.expectRevert(abi.encodeWithSelector(ErrorsLib.PreLIFTooLow.selector));
+        vm.expectRevert(ErrorsLib.PreLIFTooLow.selector);
         factory.createPreLiquidation(id, preLiquidationParams);
     }
 
@@ -87,7 +87,7 @@ contract PreLiquidationErrorTest is BaseTest {
         preLiquidationParams.preLIF2 =
             bound(preLiquidationParams.preLIF2, WAD.wDivDown(marketParams.lltv) + 1, type(uint256).max);
 
-        vm.expectRevert(abi.encodeWithSelector(ErrorsLib.PreLIFTooHigh.selector));
+        vm.expectRevert(ErrorsLib.PreLIFTooHigh.selector);
         factory.createPreLiquidation(id, preLiquidationParams);
     }
 
@@ -105,12 +105,12 @@ contract PreLiquidationErrorTest is BaseTest {
 
         preLiquidationParams.preLIF2 = bound(preLiquidationParams.preLIF2, WAD, preLiquidationParams.preLIF1 - 1);
 
-        vm.expectRevert(abi.encodeWithSelector(ErrorsLib.PreLIFDecreasing.selector));
+        vm.expectRevert(ErrorsLib.PreLIFDecreasing.selector);
         factory.createPreLiquidation(id, preLiquidationParams);
     }
 
     function testNonexistentMarket(PreLiquidationParams memory preLiquidationParams) public virtual {
-        vm.expectRevert(abi.encodeWithSelector(ErrorsLib.NonexistentMarket.selector));
+        vm.expectRevert(ErrorsLib.NonexistentMarket.selector);
         factory.createPreLiquidation(Id.wrap(bytes32(0)), preLiquidationParams);
     }
 

diff --git a/test/PreLiquidationTest.sol b/test/PreLiquidationTest.sol
@@ -32,6 +32,48 @@ contract PreLiquidationTest is BaseTest, IPreLiquidationCallback {
         factory = new PreLiquidationFactory(address(MORPHO));
     }
 
+    function testPreLiquidationLiquidatable(
+        PreLiquidationParams memory preLiquidationParams,
+        uint256 collateralAmount,
+        uint256 borrowAmount,
+        uint256 newPrice
+    ) public virtual {
+        preLiquidationParams = boundPreLiquidationParameters({
+            preLiquidationParams: preLiquidationParams,
+            minPreLltv: WAD / 2,
+            maxPreLltv: marketParams.lltv - 1,
+            minPreLCF: WAD / 100,
+            maxPreLCF: WAD,
+            minPreLIF: WAD,
+            maxPreLIF: WAD.wDivDown(lltv),
+            preLiqOracle: marketParams.oracle
+        });
+
+        collateralAmount = bound(collateralAmount, minCollateral, maxCollateral);
+        (uint256 collateralQuoted, uint256 borrowPreLiquidationThreshold, uint256 borrowLiquidationThreshold) =
+            _getBorrowBounds(preLiquidationParams, marketParams, collateralAmount);
+        borrowAmount = bound(borrowAmount, borrowPreLiquidationThreshold + 1, borrowLiquidationThreshold);
+
+        _preparePreLiquidation(preLiquidationParams, collateralAmount, borrowAmount, LIQUIDATOR);
+
+        uint256 ltv = borrowAmount.wDivUp(collateralQuoted);
+        uint256 prevPrice = oracle.price();
+        newPrice = bound(newPrice, prevPrice / 10, prevPrice.wDivDown(marketParams.lltv).wMulDown(ltv));
+        oracle.setPrice(newPrice);
+
+        uint256 newLtv = borrowAmount.wDivUp(collateralAmount.mulDivDown(newPrice, ORACLE_PRICE_SCALE));
+        vm.assume(newLtv > marketParams.lltv);
+
+        vm.startPrank(LIQUIDATOR);
+        Position memory position = MORPHO.position(id, BORROWER);
+
+        uint256 closeFactor = _closeFactor(preLiquidationParams, newLtv);
+        uint256 repayableShares = uint256(position.borrowShares).wMulDown(closeFactor);
+
+        vm.expectRevert(ErrorsLib.LiquidatablePosition.selector);
+        preLiquidation.preLiquidate(BORROWER, 0, repayableShares, hex"");
+    }
+
     function testPreLiquidationShares(
         PreLiquidationParams memory preLiquidationParams,
         uint256 collateralAmount,
@@ -191,7 +233,7 @@ contract PreLiquidationTest is BaseTest, IPreLiquidationCallback {
 
         vm.startPrank(LIQUIDATOR);
 
-        vm.expectRevert(abi.encodeWithSelector(ErrorsLib.NotPreLiquidatablePosition.selector));
+        vm.expectRevert(ErrorsLib.NotPreLiquidatablePosition.selector);
         preLiquidation.preLiquidate(BORROWER, 0, 1, hex"");
 
         vm.warp(block.timestamp + 12);
@@ -249,7 +291,7 @@ contract PreLiquidationTest is BaseTest, IPreLiquidationCallback {
 
         vm.startPrank(LIQUIDATOR);
 
-        vm.expectRevert(abi.encodeWithSelector(ErrorsLib.NotPreLiquidatablePosition.selector));
+        vm.expectRevert(ErrorsLib.NotPreLiquidatablePosition.selector);
         preLiquidation.preLiquidate(BORROWER, 0, 1, hex"");
     }
 }