calnix / collateralized-vault

Objective

Collateralized Vault: contract that acts as a collateralized debt engine

For a full illustrated walkthrough, please see: https://calnix.gitbook.io/solidity-lr/yield-mentorship-2022/5-collateralized-vault

Contract allows users to deposit an asset they own (collateral), to borrow a different asset that the Vault owns (underlying). Exchange rate determined by oracle; - if value of collateral drops in underlying terms, the user will be liquidated.

Tokens

Collateral: WETH Underlying: DAI

Contract

1. Pull the contract code for both from Etherscan
2. Add a mint() function that allows you to obtain as much as you need for testing.

Workflow

1. Users deposit WETH into Vault,

   • (WETH frm User to Vault. Vault recirds WETH deposited.)

2. Users borrow DAI against their WETH

   • as long as the value DAI they borrow in WETH terms is less than the value of their WETH collateral
   • DAI_value_in_WETH < WETH Collateral
   • Vault sends DAI to the users.
   • Vault owner finances DAI to the Vault on construction.

3. Exchange rate: Chainlink Oracle [https://docs.chain.link/docs/ethereum-addresses]

4. Users can repay debt in DAI

5. Withdrawal

   • To withdraw WETH, the users must repay the DAI they borrowed.

6. Liquidation

   • If ETH/DAI price changes such tt debt_value > collateral_value, Vault will erase user records from the contract -> cancelling the user debt, and at the same time stopping that user from withdrawing their collateral.

(https://1733885843-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FTgomzlmn9NrxUY0OQ3cD%2Fuploads%2FfMw1V1lKmxE7suN2JUGs%2FUntitled-2022-05-08-1843.excalidraw.png?alt=media&token=13abcd1e-710c-44c2-ad9d-f804b55bd501)

Process

Dependencies

• forge install yieldprotocol/yield-utils-v2 (IERC20 interface)
• forge install openZeppelin/openzeppelin-contracts
  (Ownable.sol)
• forge install smartcontractkit/chainlink
  (AggregatorV3 and MockV3Aggregator)

Pull contracts from Etherscan

WETH9.sol: https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2#code DAI.sol: https://etherscan.io/address/0x6b175474e89094c44da98b954eedeac495271d0f#code

Updating contracts to v0.8.0

WETH9.sol:

1. added 'emit' to all events
2. uint(-1) refactored to type(uint).max (line 70)

DAI.sol:

-> removed inheritance of LibNote -> removed note modifier from function reply and deny (line 78 & 79) -> line 112: removed public from constructor. -> line 190: now deprecated. changed to block.timestamp -> line 192: uint(-1) changed to type(uint).max (also on 131, 147)

Pricing + Decimal scaling

Testing

Action: deposit, borrow, repay, withdraw. liquidated

StateZero:(Vault has 10000 DAI)

• testVaultHasDAI
• User deposits WETH

• cannotWithdraw -> nothing to withdraw. no need to test.

StateDeposited: (Vault has 10000 DAI, 1 WETH) | (user deposited 1 WETH. can borrow, withdraw)

• userCannotWithdrawExcess
• userCannotBeLiquidatedWithoutDebt
• userCannotBorrowInExcess

• User can withdraw freely in absence of debt (fuzzing)
• User can borrow against collateral provided

StateBorrowed: (user has borrowed half of maxDebt. actions:[borrow,repay,withdraw])

• userCannotBorrowExcessOfMargin
• userCannotWithdrawExcessOfMargin
• userCannotbeLiquidated - price unchanged.

• User Repays (Fuzzing)

StateLiquidation (setup price to exceed)

• userLiquidated
• testOnlyOwnerCanCallLiquidate

Deployment

Node provider: Alchemy Target network: Ethereum-Goerli