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fix: add checks for liquidationPenaltyRedistribution #27

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Merged
merged 1 commit into from
Nov 19, 2025
Merged

fix: add checks for liquidationPenaltyRedistribution #27

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11 changes: 8 additions & 3 deletions contracts/src/SystemParams.sol
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Original file line number Diff line number Diff line change
Expand Up @@ -82,9 +82,6 @@ contract SystemParams is ISystemParams, Initializable {
if (_liquidationParams.liquidationPenaltySP > _liquidationParams.liquidationPenaltyRedistribution) {
revert SPPenaltyGtRedist();
}
if (_liquidationParams.liquidationPenaltyRedistribution > MAX_LIQUIDATION_PENALTY_REDISTRIBUTION) {
revert RedistPenaltyTooHigh();
}

// Validate gas compensation parameters
if (_gasCompParams.collGasCompensationDivisor == 0 || _gasCompParams.collGasCompensationDivisor > 1000) {
Expand All @@ -103,6 +100,14 @@ contract SystemParams is ISystemParams, Initializable {
if (_collateralParams.bcr < 5 * _1pct || _collateralParams.bcr >= 50 * _1pct) revert InvalidBCR();
if (_collateralParams.scr <= _100pct || _collateralParams.scr >= 2 * _100pct) revert InvalidSCR();

// The redistribution penalty must not exceed the overcollateralization buffer (MCR - 100%)
if (
_liquidationParams.liquidationPenaltyRedistribution > MAX_LIQUIDATION_PENALTY_REDISTRIBUTION
|| _liquidationParams.liquidationPenaltyRedistribution > _collateralParams.mcr - _100pct
) {
revert RedistPenaltyTooHigh();
}

// Validate interest parameters
if (_interestParams.minAnnualInterestRate > MAX_ANNUAL_INTEREST_RATE) {
revert MinInterestRateGtMax();
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81 changes: 81 additions & 0 deletions contracts/test/systemParams.t.sol
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Original file line number Diff line number Diff line change
Expand Up @@ -164,6 +164,87 @@ contract SystemParamsTest is DevTestSetup {
);
}

function testConstructorRevertsWhenRedistPenaltyExceedsMCRBuffer() public {
// MCR = 110%, so buffer = 10%. Set redistribution penalty to 11% (exceeds buffer)
ISystemParams.LiquidationParams memory liquidationParams = ISystemParams.LiquidationParams({
liquidationPenaltySP: 5e16,
liquidationPenaltyRedistribution: 11 * _1pct // 11% > (110% - 100%)
});

vm.expectRevert(ISystemParams.RedistPenaltyTooHigh.selector);
new SystemParams(false,
_getValidDebtParams(),
liquidationParams,
_getValidGasCompParams(),
_getValidCollateralParams(),
_getValidInterestParams(),
_getValidRedemptionParams(),
_getValidPoolParams()
);
}

function testConstructorAllowsRedistPenaltyEqualToMCRBuffer() public {
// MCR = 110%, so buffer = 10%. Set redistribution penalty to exactly 10%
ISystemParams.LiquidationParams memory liquidationParams = ISystemParams.LiquidationParams({
liquidationPenaltySP: 5e16,
liquidationPenaltyRedistribution: 10 * _1pct // 10% == (110% - 100%)
});

// Should not revert
SystemParams params = new SystemParams(false,
_getValidDebtParams(),
liquidationParams,
_getValidGasCompParams(),
_getValidCollateralParams(),
_getValidInterestParams(),
_getValidRedemptionParams(),
_getValidPoolParams()
);

assertEq(params.LIQUIDATION_PENALTY_REDISTRIBUTION(), 10 * _1pct);
}

function testConstructorRevertsWhenRedistPenaltyExceedsMCRBufferWithDifferentMCR() public {
// MCR = 115%, so buffer = 15%. Set redistribution penalty to 16% (exceeds buffer)
ISystemParams.CollateralParams memory collateralParams = ISystemParams.CollateralParams({
ccr: 150 * _1pct,
scr: 115 * _1pct,
mcr: 115 * _1pct,
bcr: 10 * _1pct
});

ISystemParams.LiquidationParams memory liquidationParams = ISystemParams.LiquidationParams({
liquidationPenaltySP: 5e16,
liquidationPenaltyRedistribution: 16 * _1pct // 16% > (115% - 100%)
});

vm.expectRevert(ISystemParams.RedistPenaltyTooHigh.selector);
new SystemParams(false,
_getValidDebtParams(),
liquidationParams,
_getValidGasCompParams(),
collateralParams,
_getValidInterestParams(),
_getValidRedemptionParams(),
_getValidPoolParams()
);

liquidationParams = ISystemParams.LiquidationParams({
liquidationPenaltySP: 5e16,
liquidationPenaltyRedistribution: 15 * _1pct // 15%
});

new SystemParams(false,
_getValidDebtParams(),
liquidationParams,
_getValidGasCompParams(),
collateralParams,
_getValidInterestParams(),
_getValidRedemptionParams(),
_getValidPoolParams()
);
}

// ========== GAS COMPENSATION VALIDATION TESTS ==========

function testConstructorRevertsWhenGasCompDivisorZero() public {
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