Fix inflated collateral (#354)

* Inflated collateral issue.

* Fix inflated collateral.

* Bound current utilization ratio to 100% max.

* Add check for zero debt shares just in case.

* Add migration.

* Return error if utilization rate > 100%.

* Revert "Return error if utilization rate > 100%."

This reverts commit 835efaf.

* Update migration to v2.0.3.

* Update schema.

contracts/credit-manager/Cargo.toml

@@ -1,6 +1,6 @@
 [package]
 name          = "mars-credit-manager"
-version       = "2.0.2"
+version       = "2.0.3"
 authors       = { workspace = true }
 license       = { workspace = true }
 edition       = { workspace = true }

contracts/credit-manager/src/borrow.rs

@@ -31,6 +31,11 @@ pub fn borrow(mut deps: DepsMut, account_id: &str, coin: Coin) -> ContractResult
             .checked_multiply_ratio(coin.amount, total_debt_amount)?
     };
 
+    // It shouldn't happen but just in case
+    if debt_shares_to_add.is_zero() {
+        return Err(ContractError::ZeroDebtShares);
+    }
+
     TOTAL_DEBT_SHARES.update(deps.storage, &coin.denom, |shares| {
         shares
             .unwrap_or_else(Uint128::zero)

contracts/credit-manager/src/contract.rs

@@ -128,6 +128,6 @@ pub fn query(deps: Deps, env: Env, msg: QueryMsg) -> ContractResult<Binary> {
 pub fn migrate(deps: DepsMut, env: Env, msg: MigrateMsg) -> ContractResult<Response> {
     match msg {
         MigrateMsg::V1_0_0ToV2_0_0(updates) => migrations::v2_0_0::migrate(deps, env, updates),
-        MigrateMsg::V2_0_1ToV2_0_2 {} => migrations::v2_0_2::migrate(deps),
+        MigrateMsg::V2_0_2ToV2_0_3 {} => migrations::v2_0_3::migrate(deps),
     }
 }

contracts/credit-manager/src/error.rs

@@ -186,4 +186,7 @@ pub enum ContractError {
 
     #[error(transparent)]
     Oracle(#[from] OracleError),
+
+    #[error("Debt cannot be represented by zero debt shares")]
+    ZeroDebtShares,
 }

contracts/credit-manager/src/migrations/mod.rs

@@ -1,2 +1,2 @@
 pub mod v2_0_0;
-pub mod v2_0_2;
+pub mod v2_0_3;

contracts/credit-manager/src/migrations/v2_0_2.rs → contracts/credit-manager/src/migrations/v2_0_3.rs

@@ -6,7 +6,7 @@ use crate::{
     error::ContractError,
 };
 
-const FROM_VERSION: &str = "2.0.1";
+const FROM_VERSION: &str = "2.0.2";
 
 pub fn migrate(deps: DepsMut) -> Result<Response, ContractError> {
     // make sure we're migrating the correct contract and from the correct version

contracts/credit-manager/tests/tests/test_migration_v2.rs

@@ -151,24 +151,24 @@ fn successful_migration() {
 }
 
 #[test]
-fn successful_migration_to_v2_0_2() {
+fn successful_migration_to_v2_0_3() {
     let mut deps = mock_dependencies();
-    cw2::set_contract_version(deps.as_mut().storage, "crates.io:mars-credit-manager", "2.0.1")
+    cw2::set_contract_version(deps.as_mut().storage, "crates.io:mars-credit-manager", "2.0.2")
         .unwrap();
 
-    let res = migrate(deps.as_mut(), mock_env(), MigrateMsg::V2_0_1ToV2_0_2 {}).unwrap();
+    let res = migrate(deps.as_mut(), mock_env(), MigrateMsg::V2_0_2ToV2_0_3 {}).unwrap();
 
     assert_eq!(res.messages, vec![]);
     assert_eq!(res.events, vec![] as Vec<Event>);
     assert!(res.data.is_none());
     assert_eq!(
         res.attributes,
-        vec![attr("action", "migrate"), attr("from_version", "2.0.1"), attr("to_version", "2.0.2")]
+        vec![attr("action", "migrate"), attr("from_version", "2.0.2"), attr("to_version", "2.0.3")]
     );
 
     let new_contract_version = ContractVersion {
         contract: "crates.io:mars-credit-manager".to_string(),
-        version: "2.0.2".to_string(),
+        version: "2.0.3".to_string(),
     };
     assert_eq!(cw2::get_contract_version(deps.as_ref().storage).unwrap(), new_contract_version);
 }

contracts/red-bank/Cargo.toml

@@ -1,7 +1,7 @@
 [package]
 name          = "mars-red-bank"
 description   = "A smart contract that manages asset deposit, borrowing, and liquidations"
-version       = { workspace = true }
+version       = "2.0.1"
 authors       = { workspace = true }
 edition       = { workspace = true }
 license       = { workspace = true }

contracts/red-bank/src/borrow.rs

@@ -58,9 +58,15 @@ pub fn borrow(
         &borrow_market,
         env.block.time.seconds(),
     )?;
+    let debt_balance_before = get_underlying_debt_amount(
+        borrow_market.debt_total_scaled,
+        &borrow_market,
+        env.block.time.seconds(),
+    )?;
 
-    // Cannot borrow zero amount or more than available collateral
-    if borrow_amount.is_zero() || borrow_amount > collateral_balance_before {
+    // Cannot borrow zero amount or more than available liquidity
+    let available_liquidity = collateral_balance_before.checked_sub(debt_balance_before)?;
+    if borrow_amount.is_zero() || borrow_amount > available_liquidity {
         return Err(ContractError::InvalidBorrowAmount {
             denom,
         });

contracts/red-bank/src/contract.rs

@@ -1,7 +1,5 @@
-use cosmwasm_std::{
-    entry_point, to_binary, Binary, Deps, DepsMut, Empty, Env, MessageInfo, Response,
-};
-use mars_types::red_bank::{ExecuteMsg, InstantiateMsg, QueryMsg};
+use cosmwasm_std::{entry_point, to_binary, Binary, Deps, DepsMut, Env, MessageInfo, Response};
+use mars_types::red_bank::{ExecuteMsg, InstantiateMsg, MigrateMsg, QueryMsg};
 
 use crate::{
     asset, borrow, collateral, config, deposit, error::ContractError, instantiate, liquidate,
@@ -260,6 +258,9 @@ pub fn query(deps: Deps, env: Env, msg: QueryMsg) -> Result<Binary, ContractErro
 }
 
 #[cfg_attr(not(feature = "library"), entry_point)]
-pub fn migrate(deps: DepsMut, _env: Env, _msg: Empty) -> Result<Response, ContractError> {
-    migrations::v2_0_0::migrate(deps)
+pub fn migrate(deps: DepsMut, _env: Env, msg: MigrateMsg) -> Result<Response, ContractError> {
+    match msg {
+        MigrateMsg::V1_0_0ToV2_0_0 {} => migrations::v2_0_0::migrate(deps),
+        MigrateMsg::V2_0_0ToV2_0_1 {} => migrations::v2_0_1::migrate(deps),
+    }
 }

contracts/red-bank/src/error.rs

@@ -81,7 +81,7 @@ pub enum ContractError {
     #[error("Cannot have 0 as liquidity index")]
     InvalidLiquidityIndex {},
 
-    #[error("Borrow amount must be greater than 0 and less or equal available collateral (asset: {denom:?})")]
+    #[error("Borrow amount must be greater than 0 and less or equal available liquidity (asset: {denom:?})")]
     InvalidBorrowAmount {
         denom: String,
     },

contracts/red-bank/src/interest_rates.rs

@@ -111,12 +111,17 @@ pub fn update_interest_rates(
     let total_debt =
         get_underlying_debt_amount(market.debt_total_scaled, market, current_timestamp)?;
 
-    let current_utilization_rate = if !total_collateral.is_zero() {
+    let mut current_utilization_rate = if !total_collateral.is_zero() {
         Decimal::from_ratio(total_debt, total_collateral)
     } else {
         Decimal::zero()
     };
 
+    // Limit utilization_rate to 100%.
+    // With the current code it should hopefully never happen that it gets calculated to more than 100%,
+    // but better be safe than sorry.
+    current_utilization_rate = current_utilization_rate.min(Decimal::one());
+
     market.update_interest_rates(current_utilization_rate)?;
 
     Ok(response.add_event(build_interests_updated_event(&market.denom, market)))

contracts/red-bank/src/migrations/mod.rs

@@ -1 +1,2 @@
 pub mod v2_0_0;
+pub mod v2_0_1;

contracts/red-bank/src/migrations/v2_0_1.rs

@@ -0,0 +1,21 @@
+use cosmwasm_std::{DepsMut, Response};
+use cw2::{assert_contract_version, set_contract_version};
+
+use crate::{
+    contract::{CONTRACT_NAME, CONTRACT_VERSION},
+    error::ContractError,
+};
+
+const FROM_VERSION: &str = "2.0.0";
+
+pub fn migrate(deps: DepsMut) -> Result<Response, ContractError> {
+    // make sure we're migrating the correct contract and from the correct version
+    assert_contract_version(deps.storage, &format!("crates.io:{CONTRACT_NAME}"), FROM_VERSION)?;
+
+    set_contract_version(deps.storage, format!("crates.io:{CONTRACT_NAME}"), CONTRACT_VERSION)?;
+
+    Ok(Response::new()
+        .add_attribute("action", "migrate")
+        .add_attribute("from_version", FROM_VERSION)
+        .add_attribute("to_version", CONTRACT_VERSION))
+}

contracts/red-bank/tests/tests/mod.rs

@@ -5,7 +5,7 @@ mod test_borrow;
 mod test_credit_accounts;
 mod test_deposit;
 mod test_health;
-mod test_liquidate;
+mod test_inflated_collateral;
 mod test_migration_v2;
 mod test_misc;
 mod test_payment;