Morpho leverage extension #185
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| * Collateral balance * (net borrow limit - existing borrow balance) / net borrow limit | ||
| * | ||
| * Net borrow limit is calculated as: | ||
| * Collateral Balance * Collateral Price in Borrow units * morpho LLTV * (1 - unutilized leverage %) |
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I don't understand why the borrow limit increases when there is more capacity to borrow ie the unutilized leverage percentage increases. This sounds counter intuitive to me.
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When we delever we:
- Withdraw collateral
- Trade collateral for borrow tokens
- Repay borrow tokens
In this case the, the borrow limit is a bit of a misnomer actually as it describes the maximum amount of collateral tokens that can be withdrawn in step 1 without resulting in an "unhealthy" position. (and triggering a revertion here).
The more unutilized leverage the higher that "maximum withdrawal amount" (as it should be called in the delver case) is.
In the case of levering we:
- Borrow
- Swap From Borrow To Collateral
- Deposit Collateral
In this scenario the max borrow limit is aptly named as it describes the maximum amount of tokens that can be borrowed in step 1.
@MerlinEgalite Let me know if:
- That makes it more intuitive
- Our math here seems wrong to you when calculating said limit
- There is any way to defer the position health check maybe to the end of the whole levering / delevering process (i.e. after repaying the loan / depositing collateral) in which case we could increase this limit.
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Note that the resulting value is used as a an upper limit here for the rebalance "chunk" size.
| // Issue 1 SetToken | ||
| issueQuantity = ether(1); | ||
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| await morphoLeverageModule.sync(setToken.address, { gasLimit: 10000000 }); |
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I'm curious why you have to call sync here? I thought there would be no deposit or borrow positions in Morpho before calling engage.
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Good call. I didn't need to actually.
Removed it here: 3104684
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🎉 This PR is included in version 0.30.0 🎉 The release is available on: Your semantic-release bot 📦🚀 |
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