Liquidator must be incentivized to keep uTokens #1158
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Wouldn't you only want to charge a fee if the collateral utilization is at it's max though? Otherwise it will be harder to have liquidators period - depending on how high the fee is. Or maybe the higher the collateral utilization, the higher the fee? |
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In general we want to have an small incenitve to keep the liquidity in the protocol. For this use case I think the simple solution will work, and we can consider more complex solutions in the future. Feel free to make a full proposal. |
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## Description - Adds proto for `DirectLiquidationFee` as well as actually implementing the behavior. Misc additions: - Moved token <-> uToken denom functions to `types` package. Previously there were similar functions in both `types` and `keeper`. - Improved operations tests in simulation package and fixed a hidden bug (fees making messages fail if the random generator hit certain values, due to some transactions not using `CoinsSpentInMsg`) closes: #1158 --- ### Author Checklist _All items are required. Please add a note to the item if the item is not applicable and please add links to any relevant follow up issues._ I have... - [x] included the correct [type prefix](https://github.com/commitizen/conventional-commit-types/blob/v3.0.0/index.json) in the PR title - [x] added `!` to the type prefix if API or client breaking change - [x] added appropriate labels to the PR - [x] targeted the correct branch (see [PR Targeting](https://github.com/umee-network/umee/blob/main/CONTRIBUTING.md#pr-targeting)) - [x] provided a link to the relevant issue or specification - [x] added a changelog entry to `CHANGELOG.md` - [x] included comments for [documenting Go code](https://blog.golang.org/godoc) - [x] updated the relevant documentation or specification - [x] reviewed "Files changed" and left comments if necessary - [x] confirmed all CI checks have passed ### Reviewers Checklist _All items are required. Please add a note if the item is not applicable and please add your handle next to the items reviewed if you only reviewed selected items._ I have... - [ ] confirmed the correct [type prefix](https://github.com/commitizen/conventional-commit-types/blob/v3.0.0/index.json) in the PR title - [ ] confirmed all author checklist items have been addressed - [ ] reviewed state machine logic - [ ] reviewed API design and naming - [ ] reviewed documentation is accurate - [ ] reviewed tests and test coverage - [ ] manually tested (if applicable)
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Summary
In #1118 we allow liquidator to automatically receive the underlying token, instead of uToken.
The problem is that it removes the liquidity from the system, rather than incentivizing liquidator to keep the liquidity in the system
Proposal
UTokenLiquidationFeeUTokenLiquidationFee. Basically the premium he will receive will equal topremium * (1-UTokenLiquidationFee)For Admin Use
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