Max Spot Price: closeShort

[jalextowle]

The recent #642 only addressed the negative interest problem for openLong. closeShort has an identical problem because the trade increases the spot price and the curve fee results in the trader's effective spot price being larger than the pool's spot price.

We can derive the maximum spot price for closing a short in the same way that we derived it for openLong in #582. When a trader attempts to close a short of $y$ bonds on the curve, the curve will calculate $x(y)$ the amount of base needed to pay for $y$ bonds. $x(y)$ is given by:

$$ x(y) = x_{YS}(x) + \phi_c \cdot (1 - p_0) \cdot y $$

If we assume that the trader's realized price is $p_r$, then we can simplify $x_{YS}(x)$ to:

$$ x_{YS}(x) = p_r \cdot y $$

To ensure that the trader doesn't purchase bonds at a negative interest rate, we enforce the invariant that:

$$ x(y) \leq y $$

We can solve our inequality as:

$$ p_r \cdot y + \phi_c \cdot (1 - p_0) \cdot y \leq y \implies p_r \leq 1 - \phi_c \cdot (1 - p_0) $$

This is the max price that we'll need to use to ensure that shorts don't accidentally purchase some of their bonds at a negative interest rate.

[github-actions]

Hyperdrive Gas Benchmark

Benchmark suite	Current: e9be79d	Previous: 1148b95	Deviation	Status
addLiquidity: min	733 gas	733 gas	0%	🟰
addLiquidity: avg	54041 gas	54072 gas	-0.0573%	✅
addLiquidity: max	96720 gas	96704 gas	0.0165%	🚨
checkpoint: min	558 gas	558 gas	0%	🟰
checkpoint: avg	47640 gas	47642 gas	-0.0042%	✅
checkpoint: max	99410 gas	99410 gas	0%	🟰
closeLong: min	755 gas	755 gas	0%	🟰
closeLong: avg	23436 gas	23397 gas	0.1667%	🚨
closeLong: max	114183 gas	114183 gas	0%	🟰
closeShort: min	802 gas	802 gas	0%	🟰
closeShort: avg	26710 gas	25012 gas	6.7887%	🚨
closeShort: max	112872 gas	111387 gas	1.3332%	🚨
initialize: min	662 gas	662 gas	0%	🟰
initialize: avg	177327 gas	177327 gas	0%	🟰
initialize: max	251633 gas	251633 gas	0%	🟰
openLong: min	757 gas	757 gas	0%	🟰
openLong: avg	57017 gas	56892 gas	0.2197%	🚨
openLong: max	218431 gas	218401 gas	0.0137%	🚨
openShort: min	712 gas	712 gas	0%	🟰
openShort: avg	56133 gas	56235 gas	-0.1814%	✅
openShort: max	217803 gas	217803 gas	0%	🟰
removeLiquidity: min	777 gas	777 gas	0%	🟰
removeLiquidity: avg	75958 gas	75957 gas	0.0013%	🚨
removeLiquidity: max	203187 gas	203187 gas	0%	🟰

This comment was automatically generated by workflow using github-action-benchmark.

[coveralls]

coverage: 97.551%. remained the same when pulling e9be79d on jalextowle/feature/close-short-max-spot-price into 3c9bcea on main.