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VaultUtils

The VaultUtils contract provides utility functions for the Vault, handling fee calculations, funding rate updates, and position validation. It serves as a companion contract to the main Vault, allowing for modular upgrades and improved code organization.

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Contract Overview

The VaultUtils handles:
  • Validation of position liquidations
  • Calculation of position fees
  • Calculation of funding fees
  • Dynamic fee adjustments based on pool utilization
  • Swap fee calculations
The VaultUtils contract is designed to be upgradable separately from the main Vault, allowing for improvements to fee calculation and validation logic without changing the core Vault contract.

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Key Functions

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Liquidation Validation

function validateLiquidation(
    address _account,
    address _collateralToken,
    address _indexToken,
    bool _isLong,
    bool _raise
) external view returns (uint256, uint256);
Validates whether a position can be liquidated and returns liquidation information.

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Fee Calculations

function getPositionFee(
    address _account,
    address _collateralToken,
    address _indexToken,
    bool _isLong,
    uint256 _sizeDelta
) external view returns (uint256);
Calculates the fee for increasing or decreasing a position. 
function getFundingFee(
    address _account,
    address _collateralToken,
    address _indexToken,
    bool _isLong,
    uint256 _size,
    uint256 _entryFundingRate
) external view returns (uint256);
Calculates the funding fee for a position based on its size and entry funding rate. 
function getFeeBasisPoints(
    address _token,
    uint256 _usdgDelta,
    uint256 _feeBasisPoints,
    uint256 _taxBasisPoints,
    bool _increment
) external view returns (uint256);
Calculates dynamic fee basis points based on token pool utilization.

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Integration with Vault

The VaultUtils is tightly integrated with the Vault contract:
  1. The Vault calls VaultUtils for fee calculations and position validations
  2. VaultUtils accesses the Vault’s state to perform its calculations
  3. Only the Vault can set itself as the vault address in VaultUtils
This separation of concerns allows:
  • More modular code organization
  • Easier upgradeability for fee calculations
  • Reduced complexity in the main Vault contract

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Liquidation Mechanics

The validateLiquidation function is a critical component for the protocol’s position liquidation system:
  1. It checks if a position has sufficient collateral based on:
    • Current leverage vs. maximum allowed leverage
    • Position size and collateral
    • Current market price
    • Accrued funding fees
  2. It returns liquidation values including:
    • Liquidation state (0 = cannot liquidate, 1 = can liquidate, 2 = can liquidate with high leverage)
    • Margin fee amount
The liquidation validation logic is crucial for the protocol’s security. It ensures positions are liquidated when they pose a risk to the protocol, while protecting users from unfair liquidations.

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Dynamic Fee System

The VaultUtils implements a dynamic fee system that adjusts fees based on pool utilization: 
if (poolAmount < targetAmount) {
    // pool is imbalanced, increase the fee for actions that would further imbalance it
    feeBasisPoints = feeBasisPoints + imbalanceFactor;
} else {
    // pool is balanced or over-balanced, decrease the fee for actions that would balance it
    feeBasisPoints = feeBasisPoints - imbalanceFactor;
}
This dynamic fee system helps:
  • Balance token pools by incentivizing balancing actions
  • Discourage actions that would imbalance pools
  • Provide price stability for token swaps

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Security Considerations

The VaultUtils implements several security features:
  • Access Control: Only the Vault contract can set itself as the vault address
  • Parameter Validation: Checks for reasonable values in fee calculations
  • Liquidation Safety: Validates liquidations based on multiple criteria
  • Dynamic Fees: Adjusts fees to protect the protocol from imbalances
The VaultUtils contract cannot be directly accessed by users. All interactions flow through the main Vault contract.

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Example: Fee Calculation Flow

1

Position Increase Request

When a user requests to increase a position, the Vault calls VaultUtils for fee calculation.
// In Vault contract
function increasePosition(...) external {
    // Calculate position fee
    uint256 fee = vaultUtils.getPositionFee(
        _account,
        _collateralToken,
        _indexToken,
        _isLong,
        _sizeDelta
    );
    
    // Deduct fee from collateral
    collateral = collateral.sub(fee);
    
    // Rest of position increase logic
}
2

Fee Calculation

The VaultUtils calculates the fee based on the position size and fee configuration.
// In VaultUtils contract
function getPositionFee(...) public view returns (uint256) {
    // Get base fee in basis points
    uint256 feeBasisPoints = vault.marginFeeBasisPoints();
    
    // Calculate fee amount
    uint256 feeAmount = _sizeDelta.mul(feeBasisPoints).div(BASIS_POINTS_DIVISOR);
    
    return feeAmount;
}
3

Funding Fee Calculation

When a position is decreased, the Vault calls VaultUtils to calculate funding fees.
// In VaultUtils contract
function getFundingFee(...) public view returns (uint256) {
    // Current cumulative funding rate
    uint256 fundingRate = vault.cumulativeFundingRates(_collateralToken);
    
    // Calculate funding fee based on rate change
    uint256 fundingFee = _size.mul(fundingRate.sub(_entryFundingRate)).div(FUNDING_RATE_PRECISION);
    
    return fundingFee;
}
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