Keeper Bots

There is an open-source example keeper implementation available at fx-keeper-example.

State Syncing

In this implementation, the bot relies on the stateSync class to synchronize states locally and reassemble the on-chain status. Based on the synchronized data, it calculates relevant metrics and executes rebalance and liquidate operations accordingly.

Calculate how much to rebalance

There are two known restrictions from the contracts:

1. (debt - x) / (price * (coll - y * (1 + incentive))) ≤ target_ratio

where

• x = debt to be repaid

• y = collateral to be removed

• incentive = rebalance bounty ratio

1. debt / (price * coll) >= target_ratio

From these conditions, we derive the following formula:

x ≥ (debt - target_ratio × price × coll) / (1 - target_ratio × (1 + incentive))

Code implementation(source):

function getRawDebtToRebalance(tick: ITickToBalance): bigint {

  const rawDebts =
    (tick.rawDebts * PRECISION * PRECISION - tick.debtRatio * tick.price * tick.rawColls) /
    (PRECISION * PRECISION - (PRECISION * tick.debtRatio * (FEE_PRECISION + tick.bonusRatio)) / FEE_PRECISION);
  return rawDebts;
}

Calculate how much to liquidate:

Based on the restrictions from the contract:

rawDebts / price * (1 + bonus) <= position.rawColls + balance

We can derive:

 rawDebts <= (position.rawColls + balance) / (1 + bonus) * price

Code implementation(source):

function getRawDebtToLiquidate(position: IPositionToLiquidate, balance: bigint): bigint {
  // rawDebts / price * (1 + bonus) <= position.rawColls + balance
  // rawDebts <= (position.rawColls + balance) / (1 + bonus) * price
  let rawDebts =
    ((((position.rawColls + balance) * position.price) / PRECISION) * FEE_PRECISION) /
    (FEE_PRECISION + position.bonusRatio);
  (position.rawColls * position.price) / PRECISION;
  if (rawDebts > position.rawDebts) rawDebts = position.rawDebts;
  return rawDebts;
}

redeemByCreditNote

When CreditNote is received, you may use redeemByCreditNote to redeem to the underlying assets. You can check the example code FxProtocolLongBatchExecutor contract of the bots to see a full process to how to integrate it.

• First, in a flashloan, it use the borrowed fund to do rebalance/liquidation

• After this, it checks the USDC balance

• Then, it converts all the newly fetched collateral assets to USDC

• Then, it checks CreditNote balance and use redeemByCreditNote to obtain the assets and get more USDC

• Then try to repay the borrowed funds to finish the flashloan

    // do rebalance or liquidate
    uint256 amountBase;
    address pool;
    if (callType == 0) {
      (pool, amountBase, assets) = _doRebalance(tokenToUse, assets, userData);
    } else if (callType == 1) {
      (pool, amountBase, assets) = _doLiquidate(tokenToUse, assets, userData);
    }
    // swap base to USDC
    uint256 usdcAmount = IERC20(USDC).balanceOf(address(this));
    {
      (, address swapTarget, bytes memory swapData) = abi.decode(userData[1:], (address, address, bytes));
      IERC20(IPool(pool).collateralToken()).forceApprove(swapTarget, amountBase);
      if (amountBase > 0) {
        (bool success, ) = swapTarget.call(swapData);
        _popupRevertReason(success);
      }
    }
    usdcAmount = IERC20(USDC).balanceOf(address(this)) - usdcAmount;
    // check if we have credit note
    address shortPool = IPool(pool).counterparty();
    if (shortPool != address(0)) {
      address creditNote = IShortPool(shortPool).creditNote();
      uint256 balance = IERC20(creditNote).balanceOf(address(this));
      if (balance > 0) {
        IERC20(creditNote).forceApprove(shortPoolManager, balance);
        balance = IShortPoolManager(shortPoolManager).redeemByCreditNote(shortPool, balance, 0);
        // swap fxUSD to USDC
        usdcAmount += ICurveStableSwapNG(USDC_fxUSD_POOL).exchange(1, 0, balance, 0);
      }
    }