Don't incentivise using asset tokens with high liquidation fee during liquidation (#536)

* Don't incentivise using non-usdc coins to liquidate tokens

Signed-off-by: microwavedcola1 <microwavedcola@gmail.com>

* fix tests

Signed-off-by: microwavedcola1 <microwavedcola@gmail.com>

* fix tests

Signed-off-by: microwavedcola1 <microwavedcola@gmail.com>

* review: add back test comment

---------

Signed-off-by: microwavedcola1 <microwavedcola@gmail.com>
Co-authored-by: Christian Kamm <mail@ckamm.de>

programs/mango-v4/src/instructions/token_liq_with_token.rs

@@ -115,16 +115,13 @@ pub(crate) fn liquidation_action(
     // Liquidation fees work by giving the liqor more assets than the oracle price would
     // indicate. Specifically we choose
     //   assets =
-    //     liabs * liab_oracle_price/asset_oracle_price * (1 + liab_liq_fee + asset_liq_fee)
-    // Which means that we use a increased liab oracle price and reduced asset oracle price for
-    // the conversion.
-    // It would be more fully correct to use (1+liab_liq_fee)*(1+asset_liq_fee), but for small
-    // fee amounts that is nearly identical.
+    //     liabs * liab_oracle_price/asset_oracle_price * (1 + liab_liq_fee)
+    // Which means that we use a increased liab oracle price for the conversion.
     // For simplicity we write
     //   assets = liabs * liab_oracle_price / asset_oracle_price * fee_factor
     //   assets = liabs * liab_oracle_price_adjusted / asset_oracle_price
     //          = liabs * lopa / aop
-    let fee_factor = I80F48::ONE + asset_bank.liquidation_fee + liab_bank.liquidation_fee;
+    let fee_factor = I80F48::ONE + liab_bank.liquidation_fee;
     let liab_oracle_price_adjusted = liab_oracle_price * fee_factor;
 
     let init_asset_weight = asset_bank.init_asset_weight;

programs/mango-v4/tests/cases/test_bankrupt_tokens.rs

@@ -184,7 +184,7 @@ async fn test_bankrupt_tokens_socialize_loss() -> Result<(), TransportError> {
     assert!(account_position_closed(solana, account, collateral_token1.bank).await);
     assert_eq!(
         account_position(solana, account, borrow_token1.bank).await,
-        (-350.0f64 + (1000.0 / 20.0 / 1.04)).round() as i64
+        (-350.0f64 + (1000.0 / 20.0 / 1.02)).round() as i64
     );
     let liqee = get_mango_account(solana, account).await;
     assert!(liqee.being_liquidated());
@@ -206,7 +206,7 @@ async fn test_bankrupt_tokens_socialize_loss() -> Result<(), TransportError> {
     .await
     .unwrap();
     assert!(account_position_closed(solana, account, collateral_token2.bank).await);
-    let borrow1_after_liq = -350.0f64 + (1000.0 / 20.0 / 1.04) + (20.0 / 20.0 / 1.04);
+    let borrow1_after_liq = -350.0f64 + (1000.0 / 20.0 / 1.02) + (20.0 / 20.0 / 1.02);
     assert_eq!(
         account_position(solana, account, borrow_token1.bank).await,
         borrow1_after_liq.round() as i64

programs/mango-v4/tests/cases/test_liq_tokens.rs

@@ -331,10 +331,10 @@ async fn test_liq_tokens_with_token() -> Result<(), TransportError> {
     .await
     .unwrap();
 
-    // the we only have 20 collateral2, and can trade them for 20 / 1.04 = 19.2 borrow2
+    // the we only have 20 collateral2, and can trade them for 20 / 1.02 = 19.6 borrow2
     assert_eq!(
         account_position(solana, account, borrow_token2.bank).await,
-        -50 + 19
+        -50 + 20
     );
     assert!(account_position_closed(solana, account, collateral_token2.bank).await,);
     let liqee = get_mango_account(solana, account).await;
@@ -360,11 +360,11 @@ async fn test_liq_tokens_with_token() -> Result<(), TransportError> {
     .await
     .unwrap();
 
-    // the asset cost for 50-19=31 borrow2 is 31 * 1.04 = 32.24
+    // the asset cost for 50-19=31 borrow2 is 31 * 1.02 = 31.62
     assert!(account_position_closed(solana, account, borrow_token2.bank).await);
     assert_eq!(
         account_position(solana, account, collateral_token1.bank).await,
-        1000 - 32
+        1000 - 31
     );
     let liqee = get_mango_account(solana, account).await;
     assert!(liqee.being_liquidated());
@@ -388,14 +388,14 @@ async fn test_liq_tokens_with_token() -> Result<(), TransportError> {
     .await
     .unwrap();
 
-    // the asset cost for 10 borrow1 is 10 * 2 * 1.04 = 20.8
+    // the asset cost for 10 borrow1 is 10 * 2 * 1.02 = 20.4
     assert_eq!(
         account_position(solana, account, borrow_token1.bank).await,
         -350 + 10
     );
     assert_eq!(
         account_position(solana, account, collateral_token1.bank).await,
-        1000 - 32 - 21
+        1000 - 31 - 20
     );
     let liqee = get_mango_account(solana, account).await;
     assert!(liqee.being_liquidated());
@@ -420,16 +420,16 @@ async fn test_liq_tokens_with_token() -> Result<(), TransportError> {
     .unwrap();
 
     // health after borrow2 liquidation was (1000-32) * 0.6 - 350 * 2 * 1.4 = -399.2
-    // borrow1 needed 399.2 / (1.4*2 - 0.6*2*1.04) = 257.2
-    // asset cost = 257.2 * 2 * 1.04 = 535
+    // borrow1 needed 399.2 / (1.4*2 - 0.6*2*1.02) = 253.29
+    // asset cost = 253.29 * 2 * 1.02 = 516.7
     // loan orignation fee = 1
     assert_eq!(
         account_position(solana, account, borrow_token1.bank).await,
-        -350 + 257
+        -350 + 253
     );
     assert_eq!(
         account_position(solana, account, collateral_token1.bank).await,
-        1000 - 32 - 535 - 1
+        1000 - 31 - 516 - 1
     );
     let liqee = get_mango_account(solana, account).await;
     assert!(!liqee.being_liquidated());
@@ -474,12 +474,11 @@ async fn test_liq_tokens_with_token() -> Result<(), TransportError> {
     .await
     .unwrap();
 
-    // Liqee's remaining collateral got dusted, only borrows remain
-    // but the borrow amount is so tiny, that being_liquidated is already switched off
+    // Liqee's remaining collateral got dusted, only borrows remain: the account is bankrupt
     let liqee = get_mango_account(solana, account).await;
     assert_eq!(liqee.active_token_positions().count(), 1);
-    assert!(account_position_f64(solana, account, borrow_token1.bank).await > -1.0);
-    assert!(!liqee.being_liquidated());
+    assert!(account_position_f64(solana, account, borrow_token1.bank).await > -2.74);
+    assert!(liqee.being_liquidated());
 
     Ok(())
 }

programs/mango-v4/tests/cases/test_perp_settle_fees.rs

@@ -339,6 +339,10 @@ async fn test_perp_settle_fees() -> Result<(), TransportError> {
     )
     .await
     .unwrap();
+<<<<<<< HEAD
+
+=======
+>>>>>>> dev
     // No change
     {
         let perp_market = solana.get_account::<PerpMarket>(perp_market).await;