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Update Liquidation #4

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Update Liquidation #4

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62b542c
feat: show liquidator profit in usd
dissimilllate Jul 5, 2023
6a98aab
chore: show protocolSeizeShareMantissa
dissimilllate Jul 5, 2023
44a41dd
chore: add comments
al-onyxprotocol Jul 18, 2023
d35598a
chore: show liquidation math
dissimilllate Jul 19, 2023
233ca1b
chore: cleanup
dissimilllate Jul 19, 2023
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4 changes: 2 additions & 2 deletions helpers/utils.js
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Original file line number Diff line number Diff line change
@@ -1,7 +1,7 @@
module.exports = {
formatNumber(number) {
formatNumber(number, maximumFractionDigits = 20) {
return new Intl.NumberFormat('en-EN', {
maximumSignificantDigits: 21,
maximumFractionDigits,
}).format(number);
},
};
38 changes: 33 additions & 5 deletions scripts/liquidation.js
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Original file line number Diff line number Diff line change
Expand Up @@ -51,14 +51,17 @@ async function main() {

// Get exchange rates for oXCN and XCN
const oXCNExchangeRate = await oXCN.callStatic.exchangeRateCurrent();
console.log(`1 XCN in oXCN: ${formatNumber((1 / (oXCNExchangeRate / 1e28)))}`);
console.log(`1 oXCN in XCN: ${formatNumber(oXCNExchangeRate / 1e28)}`);
const oXCNExchangeRateUnscaled = oXCNExchangeRate / 1e28;
console.log(`1 XCN in oXCN: ${formatNumber((1 / oXCNExchangeRateUnscaled))}`);
console.log(`1 oXCN in XCN: ${formatNumber(oXCNExchangeRateUnscaled)}`);

// The percent, ranging from 0% to 100%, of a liquidatable account's borrow that can be repaid in a single liquidate transaction.
// https://docs.onyx.org/comptroller/close-factor
const closeFactorPercentage = (await Comptroller.callStatic.closeFactorMantissa() / 1e16)
const liquidationIncentiveMantissa = (await Comptroller.callStatic.liquidationIncentiveMantissa() / 1e16);
const liquidationIncentiveCoefficient = (await Comptroller.callStatic.liquidationIncentiveMantissa() / 1e18);
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@dissimilllate dissimilllate Jul 19, 2023

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Using additional variable to keep formulas simple, because:
liquidationIncentiveCoefficient = (await Comptroller.callStatic.liquidationIncentiveMantissa() / 1e16); // 110, whilst we need 1.1 for calculations

In javascript:
1.1 / 1e2 = 0.011000000000000001

console.log('Close factor:', closeFactorPercentage, '%')
console.log('Liquidation incentive:', (await Comptroller.callStatic.liquidationIncentiveMantissa() / 1e16), '%')
console.log('Liquidation incentive:', liquidationIncentiveMantissa, '%')
console.log('\n');

// Amount of XCN tokens at signer account
Expand All @@ -71,6 +74,7 @@ async function main() {
// Store balances and liquidity info before liquidation
summary.before.xcnBalance = await XCN.balanceOf(signerAddress);
summary.before.xcnLockedForSupply = await oXCN.callStatic.balanceOfUnderlying(signerAddress);
summary.before.liquidatorLiquidity = await Comptroller.getAccountLiquidity(signerAddress);
summary.before.borrowerLiquidity = await Comptroller.getAccountLiquidity(borrowerAddress);
summary.before.borrowerXcnLockedForSupply = await oXCN.callStatic.balanceOfUnderlying(borrowerAddress);
summary.before.borrowerXcnBalance = await oXCN.callStatic.borrowBalanceCurrent(borrowerAddress)
Expand Down Expand Up @@ -116,6 +120,7 @@ async function main() {

summary.after.xcnBalance = await XCN.balanceOf(signerAddress);
summary.after.xcnLockedForSupply = await oXCN.callStatic.balanceOfUnderlying(signerAddress);
summary.after.liquidatorLiquidity = await Comptroller.getAccountLiquidity(signerAddress);
summary.after.borrowerLiquidity = await Comptroller.getAccountLiquidity(borrowerAddress);
summary.after.borrowerXcnLockedForSupply = await oXCN.callStatic.balanceOfUnderlying(borrowerAddress);
summary.after.borrowerXcnBalance = await oXCN.callStatic.borrowBalanceCurrent(borrowerAddress)
Expand All @@ -126,9 +131,32 @@ async function main() {
console.log(`Borrower balance in XCN after liquidation: ${formatNumber(summary.after.borrowerXcnBalance / 1e18)}`);
console.log(`Borrower balance locked for supply in XCN: ${formatNumber(summary.after.borrowerXcnLockedForSupply / 1e18)}`);

const liquidatorProfit = (summary.after.xcnLockedForSupply - amountToRepay) / 1e18;
const protocolSeizeShareMantissa = await oXCN.protocolSeizeShareMantissa() / 1e16;
const protocolSeizeShareCoefficient = await oXCN.protocolSeizeShareMantissa() / 1e18;
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@dissimilllate dissimilllate Jul 19, 2023

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Using additional variable to keep formulas simple, because:
protocolSeizeShareMantissa = await oXCN.protocolSeizeShareMantissa() / 1e16; // 2.8, whilst we need 0.028 for calculations

In javascript:
2.8 / 1e2 = 0.027999999999999997

const repayAmountWithIncentive = repayAmount / 1e18 * liquidationIncentiveCoefficient;
const protocolFee = repayAmountWithIncentive * protocolSeizeShareCoefficient;

console.log('\n');
console.log(`Liquidator's profit: Repay amount * Liquidation incentive:`);
console.log(`${formatNumber(repayAmount / 1e18)} * ${formatNumber(liquidationIncentiveCoefficient)} = ${formatNumber(repayAmountWithIncentive)}`);
console.log(`Liquidator has to pay protocol fee: ${formatNumber(protocolSeizeShareMantissa)} % of Liqudidator's profit`);
console.log(`${formatNumber(protocolSeizeShareCoefficient)} * ${formatNumber(repayAmountWithIncentive)} = ${formatNumber(protocolFee)}`);
console.log(`Protocol fee + Liquidator's locked for supply income = Repay amount * Liquidation incentive = Borrower's locked for supply loss`);
console.log(`${formatNumber(protocolFee, 3)} + ${formatNumber((summary.after.xcnLockedForSupply - summary.before.xcnLockedForSupply) / 1e18, 3)} = ${formatNumber(repayAmount / 1e18, 3)} * ${formatNumber(liquidationIncentiveCoefficient)} = ${formatNumber((summary.before.borrowerXcnLockedForSupply - summary.after.borrowerXcnLockedForSupply) / 1e18, 3)}`);

// Calculate XCN rate based on current liquidity, XCN supply, and collateral factor
const liquidatorProfitXCN = (summary.after.xcnLockedForSupply - amountToRepay) / 1e18;
const collateralFactorXCN = (await Comptroller.callStatic.markets(oXCN.address))[1] / 1e18;
const xcnLockedForSupplyDiff = (summary.after.xcnLockedForSupply - summary.before.xcnLockedForSupply) / 1e18;
const borrowableXCN = xcnLockedForSupplyDiff * collateralFactorXCN;
const liquidityDiff = (summary.after.liquidatorLiquidity[1] - summary.before.liquidatorLiquidity[1]) / 1e18;
const calculatedXcnUsdRate = liquidityDiff / borrowableXCN;
const liquidatorProfitUSD = liquidatorProfitXCN * calculatedXcnUsdRate;

console.log('\n');
console.log(`Liquidator profit in XCN (locked for supply - liquidation cost): ${formatNumber(liquidatorProfit)}`);
console.log('Calculated XCN rate:', calculatedXcnUsdRate);
console.log(`Liquidator profit in XCN (locked for supply - liquidation cost): ${formatNumber(liquidatorProfitXCN)}`);
console.log(`Liquidator approximate profit in USD: ${formatNumber(liquidatorProfitUSD)}`);
resolve();
}));

Expand Down