Merge pull request #128 from morpho-org/fix/bound-rate

bound (fixed) rate
morpho-org · Mar 5, 2024 · b2c9ba7 · b2c9ba7
2 parents f926397 + 9e1c932
commit b2c9ba7
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Showing 3 changed files with 26 additions and 6 deletions.
diff --git a/src/fixed-rate-irm/FixedRateIrm.sol b/src/fixed-rate-irm/FixedRateIrm.sol
@@ -15,13 +15,20 @@ string constant RATE_NOT_SET = "rate not set";
 string constant RATE_SET = "rate set";
 /// @dev Thrown when trying to set the rate at zero.
 string constant RATE_ZERO = "rate zero";
+/// @dev Thrown when trying to set a rate that is too high.
+string constant RATE_TOO_HIGH = "rate too high";
 
 /// @title FixedRateIrm
 /// @author Morpho Labs
 /// @custom:contact security@morpho.org
 contract FixedRateIrm is IFixedRateIrm {
     using MarketParamsLib for MarketParams;
 
+    /* CONSTANTS */
+
+    /// @inheritdoc IFixedRateIrm
+    uint256 public constant MAX_BORROW_RATE = 8.0 ether / uint256(365 days);
+
     /* STORAGE */
 
     /// @inheritdoc IFixedRateIrm
@@ -33,6 +40,7 @@ contract FixedRateIrm is IFixedRateIrm {
     function setBorrowRate(Id id, uint256 newBorrowRate) external {
         require(borrowRateStored[id] == 0, RATE_SET);
         require(newBorrowRate != 0, RATE_ZERO);
+        require(newBorrowRate <= MAX_BORROW_RATE, RATE_TOO_HIGH);
 
         borrowRateStored[id] = newBorrowRate;
 

diff --git a/src/fixed-rate-irm/interfaces/IFixedRateIrm.sol b/src/fixed-rate-irm/interfaces/IFixedRateIrm.sol
@@ -15,11 +15,16 @@ interface IFixedRateIrm is IIrm {
 
     /* EXTERNAL */
 
+    /// @notice Max settable borrow rate (800%).
+    function MAX_BORROW_RATE() external returns (uint256);
+
     /// @notice Borrow rates.
     function borrowRateStored(Id id) external returns (uint256);
 
     /// @notice Sets the borrow rate for a market.
     /// @dev A rate can be set by anybody, but only once.
     /// @dev `borrowRate` reverts on rate not set, so the rate needs to be set before the market creation.
+    /// @dev As interest are rounded down in Morpho, for markets with a low total borrow, setting a rate too low could
+    /// prevent interest from accruing if interactions are frequent.
     function setBorrowRate(Id id, uint256 newBorrowRate) external;
 }
diff --git a/test/forge/FixedRateIrmTest.sol b/test/forge/FixedRateIrmTest.sol
@@ -17,23 +17,24 @@ contract FixedRateIrmTest is Test {
     }
 
     function testSetBorrowRate(Id id, uint256 newBorrowRate) external {
-        vm.assume(newBorrowRate != 0);
+        newBorrowRate = bound(newBorrowRate, 1, fixedRateIrm.MAX_BORROW_RATE());
 
         fixedRateIrm.setBorrowRate(id, newBorrowRate);
         assertEq(fixedRateIrm.borrowRateStored(id), newBorrowRate);
     }
 
     function testSetBorrowRateEvent(Id id, uint256 newBorrowRate) external {
-        vm.assume(newBorrowRate != 0);
+        newBorrowRate = bound(newBorrowRate, 1, fixedRateIrm.MAX_BORROW_RATE());
 
         vm.expectEmit(true, true, true, true, address(fixedRateIrm));
         emit SetBorrowRate(id, newBorrowRate);
         fixedRateIrm.setBorrowRate(id, newBorrowRate);
     }
 
     function testSetBorrowRateAlreadySet(Id id, uint256 newBorrowRate1, uint256 newBorrowRate2) external {
-        vm.assume(newBorrowRate1 != 0);
-        vm.assume(newBorrowRate2 != 0);
+        newBorrowRate1 = bound(newBorrowRate1, 1, fixedRateIrm.MAX_BORROW_RATE());
+        newBorrowRate2 = bound(newBorrowRate2, 1, fixedRateIrm.MAX_BORROW_RATE());
+
         fixedRateIrm.setBorrowRate(id, newBorrowRate1);
         vm.expectRevert(bytes(RATE_SET));
         fixedRateIrm.setBorrowRate(id, newBorrowRate2);
@@ -44,8 +45,14 @@ contract FixedRateIrmTest is Test {
         fixedRateIrm.setBorrowRate(id, 0);
     }
 
+    function testSetBorrowRateTooHigh(Id id, uint256 newBorrowRate) external {
+        newBorrowRate = bound(newBorrowRate, fixedRateIrm.MAX_BORROW_RATE() + 1, type(uint256).max);
+        vm.expectRevert(bytes(RATE_TOO_HIGH));
+        fixedRateIrm.setBorrowRate(id, newBorrowRate);
+    }
+
     function testBorrowRate(MarketParams memory marketParams, Market memory market, uint256 newBorrowRate) external {
-        vm.assume(newBorrowRate != 0);
+        newBorrowRate = bound(newBorrowRate, 1, fixedRateIrm.MAX_BORROW_RATE());
         fixedRateIrm.setBorrowRate(marketParams.id(), newBorrowRate);
         assertEq(fixedRateIrm.borrowRate(marketParams, market), newBorrowRate);
     }
@@ -58,7 +65,7 @@ contract FixedRateIrmTest is Test {
     function testBorrowRateView(MarketParams memory marketParams, Market memory market, uint256 newBorrowRate)
         external
     {
-        vm.assume(newBorrowRate != 0);
+        newBorrowRate = bound(newBorrowRate, 1, fixedRateIrm.MAX_BORROW_RATE());
         fixedRateIrm.setBorrowRate(marketParams.id(), newBorrowRate);
         assertEq(fixedRateIrm.borrowRateView(marketParams, market), newBorrowRate);
     }