Merge pull request #290 from onflow/UlianaAndrukhiv/280-rebalancing-failures

Rebalancing Failures

Author: zhangchiqing

cadence/tests/interest_accrual_integration_test.cdc

@@ -271,8 +271,8 @@ fun test_moet_debit_accrues_interest() {
     // Rebalance persists interest accrual to storage and may auto-repay debt
     // to restore health. We use pre-rebalance values for assertions since
     // rebalance can modify debt amounts.
-    rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: borrowerPid, force: true, beFailed: false)
-
+    let rebalanceRes= rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: borrowerPid, force: true)
+    Test.expect(rebalanceRes,  Test.beSucceeded())
     let detailsAfter = getPositionDetails(pid: borrowerPid, beFailed: false)
     let healthAfter = detailsAfter.health
     let debtAfter = getDebitBalanceForType(details: detailsAfter, vaultType: Type<@MOET.Vault>())

cadence/tests/platform_integration_test.cdc

@@ -136,7 +136,8 @@ fun testUndercollateralizedPositionRebalanceSucceeds() {
 
     // rebalance should pull from the topUpSource, decreasing the MOET in the user's Vault since we use a VaultSource
     // as a topUpSource when opening the Position
-    rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true, beFailed: false)
+    let rebalanceRes = rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true)
+    Test.expect(rebalanceRes,  Test.beSucceeded())
 
     let moetBalanceAfterRebalance = getBalance(address: user.address, vaultPublicPath: MOET.VaultPublicPath)!
     let healthAfterRebalance = getPositionHealth(pid: 0, beFailed: false)
@@ -203,7 +204,8 @@ fun testOvercollateralizedPositionRebalanceSucceeds() {
 
     // rebalance should pull from the topUpSource, decreasing the MOET in the user's Vault since we use a VaultSource
     // as a topUpSource when opening the Position
-    rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true, beFailed: false)
+    let rebalanceRes = rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true)
+    Test.expect(rebalanceRes,  Test.beSucceeded())
 
     let moetBalanceAfterRebalance = getBalance(address: user.address, vaultPublicPath: MOET.VaultPublicPath)!
     let healthAfterRebalance = getPositionHealth(pid: 0, beFailed: false)

cadence/tests/rebalance_edge_cases_test.cdc

@@ -0,0 +1,300 @@
+import Test
+import BlockchainHelpers
+
+import "FlowALPv0"
+import "MOET"
+
+import "test_helpers.cdc"
+
+access(all) var snapshot: UInt64 = 0
+
+access(all)
+fun safeReset() {
+    let cur = getCurrentBlockHeight()
+    if cur > snapshot {
+        Test.reset(to: snapshot)
+    }
+}
+
+access(all)
+fun setup() {
+    deployContracts()
+
+    setMockOraclePrice(signer: PROTOCOL_ACCOUNT, forTokenIdentifier: FLOW_TOKEN_IDENTIFIER, price: 1.0)
+    createAndStorePool(signer: PROTOCOL_ACCOUNT, defaultTokenIdentifier: MOET_TOKEN_IDENTIFIER, beFailed: false)
+    addSupportedTokenZeroRateCurve(
+        signer: PROTOCOL_ACCOUNT,
+        tokenTypeIdentifier: FLOW_TOKEN_IDENTIFIER,
+        collateralFactor: 0.8,
+        borrowFactor: 1.0,
+        depositRate: 1_000_000.0,
+        depositCapacityCap: 1_000_000.0
+    )
+
+    // DEX swapper for FLOW → MOET (price 1:1, matches oracle)
+    setMockDexPriceForPair(
+        signer: PROTOCOL_ACCOUNT,
+        inVaultIdentifier: FLOW_TOKEN_IDENTIFIER,
+        outVaultIdentifier: MOET_TOKEN_IDENTIFIER,
+        vaultSourceStoragePath: MOET.VaultStoragePath,
+        priceRatio: 1.0
+    )
+
+    snapshot = getCurrentBlockHeight()
+}
+
+/// ============================================================
+/// Malicious topUpSource leads to liquidation
+///
+/// Simulates a topUpSource that provides no funds, preventing rebalancing
+/// after the position becomes undercollateralized. The position
+/// remains liquidatable and is successfully liquidated.
+/// ============================================================
+access(all)
+fun testRebalance_MaliciousTopUpSource_EnablesLiquidation() {
+    safeReset()
+
+    let user = Test.createAccount()
+    setupMoetVault(user, beFailed: false)
+    let mintRes = mintFlow(to: user, amount: 1_000.0)
+    Test.expect(mintRes, Test.beSucceeded())
+    createPosition(admin: PROTOCOL_ACCOUNT, signer: user, amount: 1_000.0, vaultStoragePath: FLOW_VAULT_STORAGE_PATH, pushToDrawDownSink: true)
+
+    // completely empty the topUpSource so that any withdrawal returns 0
+    let drain = Test.createAccount()
+    setupMoetVault(drain, beFailed: false)
+    let userMoet = getBalance(address: user.address, vaultPublicPath: MOET.VaultPublicPath)!
+    transferFungibleTokens(
+        tokenIdentifier: MOET_TOKEN_IDENTIFIER,
+        from: user,
+        to: drain,
+        amount: userMoet  // all amount
+    )
+
+    // crash price so health falls below 1.0
+    let crashPrice = 0.5
+    setMockOraclePrice(signer: PROTOCOL_ACCOUNT, forTokenIdentifier: FLOW_TOKEN_IDENTIFIER, price: crashPrice)
+    setMockDexPriceForPair(
+        signer: PROTOCOL_ACCOUNT,
+        inVaultIdentifier: FLOW_TOKEN_IDENTIFIER,
+        outVaultIdentifier: MOET_TOKEN_IDENTIFIER,
+        vaultSourceStoragePath: MOET.VaultStoragePath,
+        priceRatio: crashPrice
+    )
+
+    Test.assert(getPositionHealth(pid: 0, beFailed: false) < 1.0, message: "Position must be liquidatable after price crash")
+
+    // rebalance attempt should fail cause source has 0 MOET
+    let rebalanceRes = rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true)
+    Test.expect(rebalanceRes, Test.beFailed())
+    Test.assertError(rebalanceRes, errorMessage: "topUpSource insufficient to save position from liquidation")
+
+    // position is still liquidatable
+    Test.assert(getPositionHealth(pid: 0, beFailed: false) < 1.0,message: "Position should remain liquidatable after failed rebalance",)
+
+    let liquidator = Test.createAccount()
+    setupMoetVault(liquidator, beFailed: false)
+    mintMoet(signer: PROTOCOL_ACCOUNT, to: liquidator.address, amount: 1_000.0, beFailed: false)
+
+    let repayAmount = 100.0
+    let seizeAmount = 150.0
+
+    let collateralPreLiq = getPositionBalance(pid: 0, vaultID: FLOW_TOKEN_IDENTIFIER).balance
+    let debtPreLiq       = getPositionBalance(pid: 0, vaultID: MOET_TOKEN_IDENTIFIER).balance
+    let liqMoetBefore    = getBalance(address: liquidator.address, vaultPublicPath: MOET.VaultPublicPath)!
+
+    let liqRes = manualLiquidation(
+        signer: liquidator,
+        pid: 0,
+        debtVaultIdentifier: Type<@MOET.Vault>().identifier,
+        seizeVaultIdentifier: FLOW_TOKEN_IDENTIFIER,
+        seizeAmount: seizeAmount,
+        repayAmount: repayAmount
+    )
+    Test.expect(liqRes, Test.beSucceeded())
+
+    // position lost exactly the liquidated amounts
+    let collateralPostLiq = getPositionBalance(pid: 0, vaultID: FLOW_TOKEN_IDENTIFIER).balance
+    let debtPostLiq       = getPositionBalance(pid: 0, vaultID: MOET_TOKEN_IDENTIFIER).balance
+    Test.assertEqual(collateralPostLiq, collateralPreLiq - seizeAmount)
+    Test.assertEqual(debtPostLiq, debtPreLiq - repayAmount)
+
+    // liquidator spent MOET and received FLOW
+    let liqMoetAfter = getBalance(address: liquidator.address, vaultPublicPath: MOET.VaultPublicPath)!
+    let liqFlowAfter = getBalance(address: liquidator.address, vaultPublicPath: /public/flowTokenBalance)!
+    Test.assertEqual(liqMoetBefore - liqMoetAfter, repayAmount)
+    Test.assertEqual(liqFlowAfter, seizeAmount)
+}
+
+/// ============================================================
+/// Rebalance skipped due to DrawDownSink rejection
+///
+/// Simulates an overcollateralised position where rebalance attempts
+/// to push surplus funds to the drawDownSink, but the sink cannot
+/// accept cause was removed
+/// ============================================================
+access(all)
+fun testRebalance_DrawDownSinkRejection() {
+    safeReset()
+
+    let user = Test.createAccount()
+    setupMoetVault(user, beFailed: false)
+    transferFlowTokens(to: user, amount: 1_000.0)
+
+    createPosition(
+        admin: PROTOCOL_ACCOUNT,
+        signer: user,
+        amount: 1_000.0,
+        vaultStoragePath: FLOW_VAULT_STORAGE_PATH,
+        pushToDrawDownSink: true
+    )
+
+    let initialDebt = getPositionBalance(pid: 0, vaultID: MOET_TOKEN_IDENTIFIER).balance
+    let healthBeforePriceChange = getPositionHealth(pid: 0, beFailed: false)
+
+    setMockOraclePrice(signer: PROTOCOL_ACCOUNT, forTokenIdentifier: FLOW_TOKEN_IDENTIFIER, price: 1.5)
+
+    // price increase, position even more overcollateralised
+    let healthAfterPrice = getPositionHealth(pid: 0, beFailed: false)
+    Test.assert(healthAfterPrice >= INT_MAX_HEALTH, message: "Position should be overcollateralized after price increase, health=\(healthAfterPrice.toString())")
+    
+    let moetInVaultBeforeRebalance = getBalance(address: user.address, vaultPublicPath: MOET.VaultPublicPath)!
+
+    // remove the drawDownSink, so rebalance cannot push surplus to drawDownSink
+    let setSinkRes = setDrawDownSink(signer: user, pid: 0, sink: nil)
+    Test.expect(setSinkRes, Test.beSucceeded())
+
+    let rebalanceRes = rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true)
+    Test.expect(rebalanceRes, Test.beSucceeded())
+
+    let healthAfterRebalance = getPositionHealth(pid: 0, beFailed: false)
+    let moetInVaultAfterRebalance = getBalance(address: user.address, vaultPublicPath: MOET.VaultPublicPath)!
+
+    // debt and health stay the same
+    Test.assertEqual(moetInVaultAfterRebalance, moetInVaultBeforeRebalance)
+    let debtAfterRebalance = getPositionBalance(pid: 0, vaultID: MOET_TOKEN_IDENTIFIER).balance
+    Test.assertEqual(initialDebt, debtAfterRebalance)
+    Test.assert(healthAfterRebalance >= INT_TARGET_HEALTH, message: "Health should remain above targetHealth when sink is removed (health=\(healthAfterRebalance.toString()))")
+    Test.assertEqual(healthAfterRebalance, healthAfterPrice)
+}
+
+/// ============================================================
+/// Rebalance exceeds gas limits for large position set
+///
+/// Simulates many overcollateralised positions requiring rebalance.
+/// Since asyncUpdate processes a limited batch per call, attempting
+/// to handle too many positions in one transaction exceeds the
+/// computation limit and fails.
+/// ============================================================
+access(all)
+fun testRebalance_AsyncUpdate_ProcessesAtMostConfiguredBatchSize() {
+    safeReset()
+
+    // open positions so they land in the update queue
+    let numPositions = 150
+    var pid: UInt64 = 0
+    while pid < UInt64(numPositions) {
+        let user = Test.createAccount()
+        setupMoetVault(user, beFailed: false)
+        let mintRes = mintFlow(to: user, amount: 1_000.0)
+        Test.expect(mintRes, Test.beSucceeded())
+        createPosition(
+            admin: PROTOCOL_ACCOUNT,
+            signer: user,
+            amount: 1_000.0,
+            vaultStoragePath: FLOW_VAULT_STORAGE_PATH,
+            pushToDrawDownSink: true
+        )
+        pid = pid + 1
+    }
+
+    // raise price: all positions overcollateralised
+    //   effectiveCollateral = 1000 × 1.2 × 0.8 = 960
+    //   effectiveDebt       ≈ 615.38
+    //   health              ≈ 1.56 > maxHealth (1.5)
+    setMockOraclePrice(signer: PROTOCOL_ACCOUNT, forTokenIdentifier: FLOW_TOKEN_IDENTIFIER, price: 1.2)
+
+    // try to asyncUpdate for rebalancing positions back toward targetHealth (1.3)
+    let asyncUpdateRes = asyncUpdate()
+    Test.expect(asyncUpdateRes, Test.beFailed())
+    Test.assertError(asyncUpdateRes, errorMessage: "computation exceeds limit")
+
+    // all positions should have not been processed 
+    var i: UInt64 = 0
+    while i < UInt64(numPositions) {
+        let h = getPositionHealth(pid: i, beFailed: false)
+        Test.assert(h > INT_MAX_HEALTH, message: "Position \(i.toString()) should be overcollateralised")
+        i = i + 1
+    }
+}
+
+/// ============================================================
+/// Shared liquidity source across positions
+///
+/// Two positions share the same topUpSource. After a price drop, only one can
+/// be rebalanced due to limited funds; the first succeeds, the second fails
+/// and remains liquidatable.
+/// ============================================================
+access(all)
+fun testRebalance_ConcurrentRebalances() {
+    safeReset()
+
+    let user = Test.createAccount()
+    let drain = Test.createAccount()
+
+    setupMoetVault(user, beFailed: false)
+    setupMoetVault(drain, beFailed: false)
+
+    var mintRes = mintFlow(to: user, amount: 2_000.0)
+    Test.expect(mintRes, Test.beSucceeded())
+
+    createPosition(admin: PROTOCOL_ACCOUNT, signer: user, amount: 1_000.0, vaultStoragePath: FLOW_VAULT_STORAGE_PATH, pushToDrawDownSink: true)
+    createPosition(admin: PROTOCOL_ACCOUNT, signer: user, amount: 1_000.0, vaultStoragePath: FLOW_VAULT_STORAGE_PATH, pushToDrawDownSink: true)
+
+    // minHealth = 1.1: required deposit per position to reach minHealth after 50% price crash:
+    //   effectiveCollateral = 1 000 * 0.5 * 0.8 = 400
+    //   effectiveDebt       ≈ 615.38461538
+    //
+    // health >= 1.0 (to avoid liquidation): 400 / (615.38461538 - required) = 1.0
+    // Required MOET ≈ 215.38461538 MOET
+    //
+    // left 215.38 MOET which is enough for one position, not both
+    let moetAmount = getBalance(address: user.address, vaultPublicPath: MOET.VaultPublicPath)!
+    transferFungibleTokens(tokenIdentifier: MOET_TOKEN_IDENTIFIER, from: user, to: drain, amount: moetAmount - 215.38461538)
+
+    // drop price so both positions fall below health 1.0
+    // effectiveCollateral = 1000 * 0.5 * 0.8 = 400; debt ≈ 615 → health ≈ 0.65
+    setMockOraclePrice(signer: PROTOCOL_ACCOUNT, forTokenIdentifier: FLOW_TOKEN_IDENTIFIER, price: 0.5)
+
+    Test.assert(getPositionHealth(pid: 0, beFailed: false) < 1.0, message: "Position should be undercollateralised")
+    Test.assert(getPositionHealth(pid: 1, beFailed: false) < 1.0, message: "Position should be undercollateralised")
+    let userMoetBefore = getBalance(address: user.address, vaultPublicPath: MOET.VaultPublicPath)!
+
+    // first rebalance (position 0): user has 215.38461538 MOET — enough to rescue
+    let rebalanceRes0 = rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true)
+    Test.expect(rebalanceRes0, Test.beSucceeded())
+
+    let userMoetAfterFirst = getBalance(address: user.address, vaultPublicPath: MOET.VaultPublicPath)!
+    Test.assert(
+        userMoetAfterFirst < userMoetBefore,
+        message: "user's MOET should have decreased after first rebalance (before=\(userMoetBefore.toString()), after=\(userMoetAfterFirst.toString()))"
+    )
+
+    let health0AfterFirst = getPositionHealth(pid: 0, beFailed: false)
+    Test.assert(
+        health0AfterFirst >= 1.0,
+        message: "Position 0 should be healthy after first rebalance (health=\(health0AfterFirst.toString()))"
+    )
+    
+    // second rebalance (position 1): user has 0 MOET — not enough to rescue
+    let rebalance1 = rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 1, force: true)
+    Test.expect(rebalance1, Test.beFailed())
+    Test.assertError(rebalance1, errorMessage: "topUpSource insufficient to save position from liquidation")
+
+    // position 1 remains undercollateralised and open for liquidation
+    let health1AfterSecond = getPositionHealth(pid: 1, beFailed: false)
+    Test.assert(
+        health1AfterSecond < 1.0,
+        message: "Position 1 should remain undercollateralised after failed second rebalance (health=\(health1AfterSecond.toString()))"
+    )
+}

cadence/tests/rebalance_overcollateralised_test.cdc

@@ -65,7 +65,8 @@ fun testRebalanceOvercollateralised() {
     Test.assert(healthAfterPriceChange >= INT_MAX_HEALTH,
         message: "Expected health after price increase to be >= 1.5 but got ".concat(healthAfterPriceChange.toString()))
 
-    rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true, beFailed: false)
+    let rebalanceRes = rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true)
+    Test.expect(rebalanceRes,  Test.beSucceeded())
 
     let healthAfterRebalance = getPositionHealth(pid: 0, beFailed: false)
 

cadence/tests/rebalance_undercollateralised_test.cdc

@@ -34,7 +34,8 @@ fun testRebalanceUndercollateralised() {
     // user setup
     let user = Test.createAccount()
     setupMoetVault(user, beFailed: false)
-    mintFlow(to: user, amount: 1_000.0)
+    let mintRes = mintFlow(to: user, amount: 1_000.0)
+    Test.expect(mintRes, Test.beSucceeded())
 
     // Grant beta access to user so they can create positions
     grantBetaPoolParticipantAccess(PROTOCOL_ACCOUNT, user)
@@ -65,7 +66,8 @@ fun testRebalanceUndercollateralised() {
     let userMoetBalanceBefore = getBalance(address: user.address, vaultPublicPath: MOET.VaultPublicPath)!
     let healthAfterPriceChange = getPositionHealth(pid: 0, beFailed: false)
 
-    rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true, beFailed: false)
+    let rebalanceRes = rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true)
+    Test.expect(rebalanceRes,  Test.beSucceeded())
 
     let healthAfterRebalance = getPositionHealth(pid: 0, beFailed: false)
 
@@ -135,7 +137,8 @@ fun testRebalanceUndercollateralised_InsufficientTopUpSource() {
 
     let user = Test.createAccount()
     setupMoetVault(user, beFailed: false)
-    mintFlow(to: user, amount: 1_000.0)
+    let mintRes = mintFlow(to: user, amount: 1_000.0)
+    Test.expect(mintRes, Test.beSucceeded())
     grantBetaPoolParticipantAccess(PROTOCOL_ACCOUNT, user)
 
     // Open position: user deposits 1000 FLOW, receives ~615 MOET in their vault (topUpSource).
@@ -168,11 +171,7 @@ fun testRebalanceUndercollateralised_InsufficientTopUpSource() {
         message: "Position should be liquidatable after price crash")
 
     // Rebalance must panic: depositing 5 MOET cannot rescue the position.
-    let rebalanceRes = _executeTransaction(
-        "../transactions/flow-alp/pool-management/rebalance_position.cdc",
-        [ 0 as UInt64, true ],
-        PROTOCOL_ACCOUNT
-    )
+    let rebalanceRes = rebalancePosition(signer: PROTOCOL_ACCOUNT, pid: 0, force: true)
     Test.expect(rebalanceRes, Test.beFailed())
     Test.assertError(rebalanceRes, errorMessage: "topUpSource insufficient to save position from liquidation")
 }