> For the complete documentation index, see [llms.txt](https://fxprotocol.gitbook.io/fx-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://fxprotocol.gitbook.io/fx-docs/developers/processing-the-rebalances-and-liquidations/keeper-bots.md).

# Keeper Bots

There is an open-source example keeper implementation available at [fx-keeper-example](https://github.com/starit/fx-protocol-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

2. `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](https://github.com/AladdinDAO/aladdin-dao-sdk/blob/920f3918384e2773257670731042501bde90c254/src/bots/fx/Rebalance.ts#L45)):

```
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](https://github.com/AladdinDAO/aladdin-dao-sdk/blob/920f3918384e2773257670731042501bde90c254/src/bots/fx/Liquidate.ts#L38)):

```
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);
      }
    }
```


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