added additional validation

zeitgeistpm · Feb 27, 2024 · fca7271 · fca7271
1 parent 26f4e27
commit fca7271
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diff --git a/lib/util/amm2.spec.ts b/lib/util/amm2.spec.ts
@@ -8,7 +8,9 @@ import {
   calculatePoolAmounts,
   isValidBuyAmount,
   isValidSellAmount,
+  calculateReserveAfterSell,
 } from "./amm2";
+import { ZTG } from "@zeitgeistpm/sdk";
 
 // test cases copied from https://github.com/zeitgeistpm/zeitgeist/blob/f0586d32c692f738b04d03bec4e59a73d6899182/zrml/neo-swaps/src/math.rs
 describe("amm2", () => {
@@ -225,6 +227,18 @@ describe("amm2", () => {
     });
   });
 
+  describe("calculateReserveAfterSell", () => {
+    test("should work", () => {
+      const newReserve = calculateReserveAfterSell(
+        new Decimal(10 * 10 ** 10),
+        new Decimal(10 * 10 ** 10),
+        new Decimal(144269504088),
+      );
+
+      expect(newReserve.div(ZTG).toFixed(3)).toEqual("15.850");
+    });
+  });
+
   test("all functions", () => {
     const liquidity = new Decimal(144.00003701590745);
     const reserves = [

diff --git a/lib/util/amm2.ts b/lib/util/amm2.ts
@@ -161,11 +161,32 @@ export const isValidSellAmount = (
     return { isValid: false, message: "Price is low to sell" };
   } else if (amountIn.greaterThanOrEqualTo(numericalThreshold)) {
     return { isValid: false, message: "Amount in too high" };
+  } else if (
+    amountIn.greaterThanOrEqualTo(numericalThreshold) ||
+    calculateReserveAfterSell(
+      assetReserve,
+      amountIn,
+      liquidityParameter,
+    ).greaterThanOrEqualTo(numericalThreshold)
+  ) {
+    return { isValid: false, message: "Amount in too high" };
   } else {
     return { isValid: true };
   }
 };
 
+export const calculateReserveAfterSell = (
+  assetReserve: Decimal,
+  amountIn: Decimal,
+  liquidity: Decimal, // liqudity parameter of the pool
+) => {
+  // new_reserve = old_reserve + b ln(exp(old_reserve/liquidity_param) - 1 + exp(-amount/liquidity_param))
+  const term1 = assetReserve.div(liquidity).exp();
+  const term2 = new Decimal(0).minus(amountIn).div(liquidity).exp();
+
+  return term1.plus(term2).minus(1).ln().mul(liquidity).plus(assetReserve);
+};
+
 const lsmrConstant = 0.1;
 
 const calculatePoolNumericalThreshold = (liquidityParameter: Decimal) =>