Auction proceeds burn (#317)

* Initial auction burn and test

* Fix and improve unit testsC

* Make linter happy

* Add boundry tests for params

app/app.go

@@ -217,7 +217,7 @@ var (
 		cellarfeestypes.ModuleName:     nil,
 		incentivestypes.ModuleName:     nil,
 		axelarcorktypes.ModuleName:     nil,
-		auctiontypes.ModuleName:        nil,
+		auctiontypes.ModuleName:        {authtypes.Burner},
 		pubsubtypes.ModuleName:         nil,
 	}
 

integration_tests/auction_test.go

@@ -21,6 +21,11 @@ func (s *IntegrationTestSuite) TestAuction() {
 		s.Require().NoError(err)
 		auctionQueryClient := types.NewQueryClient(val0ClientCtx)
 
+		// Query the total supply of usomm before the auction
+		bankQueryClient := banktypes.NewQueryClient(val0ClientCtx)
+		supplyRes, err := bankQueryClient.SupplyOf(context.Background(), &banktypes.QuerySupplyOfRequest{Denom: testDenom})
+		s.Require().NoError(err)
+
 		// Verify auction created for testing exists
 		auctionQuery := types.QueryActiveAuctionRequest{
 			AuctionId: uint32(1),
@@ -115,7 +120,6 @@ func (s *IntegrationTestSuite) TestAuction() {
 		}, time.Second*30, time.Second*5, "proposal was never accepted")
 		s.T().Log("Proposal approved!")
 
-		bankQueryClient := banktypes.NewQueryClient(val0ClientCtx)
 		balanceRes, err := bankQueryClient.AllBalances(context.Background(), &banktypes.QueryAllBalancesRequest{Address: authtypes.NewModuleAddress(types.ModuleName).String()})
 		s.Require().NoError(err)
 		s.T().Logf("Auction module token balances before bids %v", balanceRes.Balances)
@@ -293,6 +297,37 @@ func (s *IntegrationTestSuite) TestAuction() {
 		s.Require().Equal(expectedEndedAuction, *endedAuctionResponse.Auction)
 		s.T().Log("Ended auction stored correctly!")
 
+		s.T().Log("Verifying cellarfees module account balance...")
+		cellarfeesModuleAddress := authtypes.NewModuleAddress(cellarfees.ModuleName).String()
+		cellarfeesBalanceRes, err := bankQueryClient.AllBalances(context.Background(), &banktypes.QueryAllBalancesRequest{Address: cellarfeesModuleAddress})
+		s.Require().NoError(err)
+
+		totalSommPaid := expectedBid1.TotalUsommPaid.Amount.Add(expectedBid2.TotalUsommPaid.Amount)
+		// default burn rate is 0.5 so 50% of the SOMM paid to the cellarfees module account
+		expectedCellarfeesSomm := totalSommPaid.Quo(sdk.NewInt(2))
+
+		found, cellarfeesSommBalance := balanceOfDenom(cellarfeesBalanceRes.Balances, testDenom)
+		s.Require().True(found, "SOMM balance not present in cellarfees module account")
+		s.Require().GreaterOrEqual(expectedCellarfeesSomm.Int64(), cellarfeesSommBalance.Amount.Int64(), "Cellarfees module account should have 50% or less of the SOMM received from the auction (less if distributions have occurred)")
+		s.T().Log("Cellarfees module account balance verified correctly!")
+
+		s.T().Log("Verifying total supply of usomm has been reduced...")
+
+		// Calculate the expected burn amount (50% of total SOMM paid in auction)
+		expectedBurnAmount := totalSommPaid.Quo(sdk.NewInt(2))
+
+		// Calculate the expected new total supply
+		expectedNewSupply := supplyRes.Amount.Amount.Sub(expectedBurnAmount)
+
+		// Query the actual new total supply
+		newSupplyRes, err := bankQueryClient.SupplyOf(context.Background(), &banktypes.QuerySupplyOfRequest{Denom: testDenom})
+		s.Require().NoError(err)
+
+		// Verify that the new supply matches the expected new supply
+		s.Require().Equal(expectedNewSupply.Int64(), newSupplyRes.Amount.Amount.Int64(), "Total supply of usomm should be reduced by the amount burnt")
+
+		s.T().Log("Total supply of usomm has been correctly reduced!")
+
 		s.T().Log("--Test completed successfully--")
 	})
 }

integration_tests/setup_test.go

@@ -414,6 +414,7 @@ func (s *IntegrationTestSuite) initGenesis() {
 	// Add an auction for integration testing of the auction module
 	var auctionGenState auctiontypes.GenesisState
 	s.Require().NoError(cdc.UnmarshalJSON(appGenState[auctiontypes.ModuleName], &auctionGenState))
+	auctionGenState.Params = auctiontypes.DefaultParams()
 	auctionGenState.TokenPrices = append(auctionGenState.TokenPrices, &auctiontypes.TokenPrice{
 		Denom:            testDenom,
 		Exponent:         6,

proto/auction/v1/genesis.proto

@@ -29,4 +29,8 @@ message Params {
     (gogoproto.nullable) = false
   ];
   uint64 minimum_auction_height = 6;
+  string auction_burn_rate = 7 [
+    (gogoproto.customtype) = "github.com/cosmos/cosmos-sdk/types.Dec",
+    (gogoproto.nullable) = false
+  ];
 }

proto/buf.lock

@@ -4,8 +4,8 @@ deps:
   - remote: buf.build
     owner: cosmos
     repository: cosmos-proto
-    commit: 1935555c206d4afb9e94615dfd0fad31
-    digest: shake256:c74d91a3ac7ae07d579e90eee33abf9b29664047ac8816500cf22c081fec0d72d62c89ce0bebafc1f6fec7aa5315be72606717740ca95007248425102c365377
+    commit: 04467658e59e44bbb22fe568206e1f70
+    digest: shake256:73a640bd60e0c523b0f8237ff34eab67c45a38b64bbbde1d80224819d272dbf316ac183526bd245f994af6608b025f5130483d0133c5edd385531326b5990466
   - remote: buf.build
     owner: cosmos
     repository: cosmos-sdk
@@ -19,5 +19,5 @@ deps:
   - remote: buf.build
     owner: googleapis
     repository: googleapis
-    commit: 4ed3bc159a8b4ac68fe253218760d035
-    digest: shake256:7149cf5e9955c692d381e557830555d4e93f205a0f1b8e2dfdae46d029369aa3fc1980e35df0d310f7cc3b622f93e19ad276769a283a967dd3065ddfd3a40e13
+    commit: e7f8d366f5264595bcc4cd4139af9973
+    digest: shake256:e5e5f1c12f82e028ea696faa43b4f9dc6258a6d1226282962a8c8b282e10946281d815884f574bd279ebd9cd7588629beb3db17b892af6c33b56f92f8f67f509

x/auction/keeper/keeper.go

@@ -325,11 +325,25 @@ func (k Keeper) FinishAuction(ctx sdk.Context, auction *types.Auction) error {
 		usommProceeds = usommProceeds.Add(bid.TotalUsommPaid.Amount)
 	}
 
-	usommProceedsCoin := sdk.NewCoin(params.BaseCoinUnit, usommProceeds)
-
-	// Send proceeds to their appropriate destination module
+	// Send proceeds to their appropriate destination
 	if usommProceeds.IsPositive() {
-		if err := k.bankKeeper.SendCoinsFromModuleToModule(ctx, types.ModuleName, auction.ProceedsModuleAccount, sdk.Coins{usommProceedsCoin}); err != nil {
+		burnRate := k.GetParamSet(ctx).AuctionBurnRate
+		finalUsommProceeds := usommProceeds
+
+		if burnRate.GT(sdk.ZeroDec()) {
+			// Burn portion of USOMM in proceeds
+			auctionBurn := sdk.NewDecFromInt(usommProceeds).Mul(burnRate).TruncateInt()
+			auctionBurnCoins := sdk.NewCoin(params.BaseCoinUnit, auctionBurn)
+			if err := k.bankKeeper.BurnCoins(ctx, types.ModuleName, sdk.NewCoins(auctionBurnCoins)); err != nil {
+				return err
+			}
+
+			finalUsommProceeds = finalUsommProceeds.Sub(auctionBurn)
+		}
+
+		// Send remaining USOMM to proceeds module
+		finalUsommProceedsCoin := sdk.NewCoin(params.BaseCoinUnit, finalUsommProceeds)
+		if err := k.bankKeeper.SendCoinsFromModuleToModule(ctx, types.ModuleName, auction.ProceedsModuleAccount, sdk.Coins{finalUsommProceedsCoin}); err != nil {
 			return err
 		}
 	}

x/auction/keeper/keeper_test.go

@@ -216,8 +216,10 @@ func (suite *KeeperTestSuite) TestHappyPathFinishAuction() {
 		TotalUsommPaid:           amountPaid2,
 	})
 
-	// Second transfer to return proceeds from bids
-	totalUsommExpected := sdk.NewCoin(params.BaseCoinUnit, amountPaid1.Amount.Add(amountPaid2.Amount))
+	// Burn and send remaining proceeds from bids
+	totalBurnExpected := sdk.NewCoin(params.BaseCoinUnit, amountPaid1.Amount.Add(amountPaid2.Amount).Quo(sdk.NewInt(2)))
+	suite.mockBurnCoins(ctx, auctionTypes.ModuleName, sdk.NewCoins(totalBurnExpected))
+	totalUsommExpected := sdk.NewCoin(params.BaseCoinUnit, amountPaid1.Amount.Add(amountPaid2.Amount).Sub(totalBurnExpected.Amount))
 	suite.mockSendCoinsFromModuleToModule(ctx, auctionTypes.ModuleName, permissionedReciever.GetName(), sdk.NewCoins(totalUsommExpected))
 
 	// Change active auction tokens remaining before finishing auction to pretend tokens were sold

x/auction/keeper/msg_server_test.go

@@ -121,7 +121,11 @@ func (suite *KeeperTestSuite) TestHappyPathSubmitBidAndFulfillFully() {
 
 	// Mock out final keeper calls necessary to finish the auction due to bid draining the available supply
 	suite.mockGetBalance(ctx, authtypes.NewModuleAddress(auctionTypes.ModuleName), saleToken, sdk.NewCoin(saleToken, sdk.NewInt(0)))
+
 	totalUsommExpected := sdk.NewCoin(params.BaseCoinUnit, sdk.NewInt(20000000000))
+	totalBurnExpected := sdk.NewCoin(params.BaseCoinUnit, totalUsommExpected.Amount.Quo(sdk.NewInt(2)))
+	totalUsommExpected = sdk.NewCoin(params.BaseCoinUnit, totalUsommExpected.Amount.Sub(totalBurnExpected.Amount))
+	suite.mockBurnCoins(ctx, auctionTypes.ModuleName, sdk.NewCoins(totalBurnExpected))
 	suite.mockSendCoinsFromModuleToModule(ctx, auctionTypes.ModuleName, permissionedReciever.GetName(), sdk.NewCoins(totalUsommExpected))
 
 	// Submit the partially fulfillable bid now

x/auction/keeper/sdk_module_mocks_test.go

@@ -26,3 +26,7 @@ func (suite *KeeperTestSuite) mockSendCoinsFromAccountToModule(ctx sdk.Context,
 func (suite *KeeperTestSuite) mockSendCoinsFromModuleToAccount(ctx sdk.Context, senderModule string, receiverAcct sdk.AccAddress, amt sdk.Coins) {
 	suite.bankKeeper.EXPECT().SendCoinsFromModuleToAccount(ctx, senderModule, receiverAcct, amt).Return(nil)
 }
+
+func (suite *KeeperTestSuite) mockBurnCoins(ctx sdk.Context, moduleName string, amt sdk.Coins) {
+	suite.bankKeeper.EXPECT().BurnCoins(ctx, moduleName, amt).Return(nil)
+}

x/auction/types/errors.go

@@ -52,4 +52,5 @@ var (
 	ErrAuctionBelowMinimumUSDValue                              = errorsmod.Register(ModuleName, 45, "auction USD value below minimum")
 	ErrInvalidMinimumAuctionHeightParam                         = errorsmod.Register(ModuleName, 46, "invalid minimum auction height param")
 	ErrAuctionBelowMinimumHeight                                = errorsmod.Register(ModuleName, 47, "auction block height below minimum")
+	ErrInvalidAuctionBurnRateParam                              = errorsmod.Register(ModuleName, 48, "invalid auction burn rate param")
 )

x/auction/types/expected_keepers.go

@@ -20,4 +20,5 @@ type BankKeeper interface {
 	GetAllBalances(ctx sdk.Context, addr sdk.AccAddress) sdk.Coins
 	GetBalance(ctx sdk.Context, addr sdk.AccAddress, denom string) sdk.Coin
 	GetDenomMetaData(ctx sdk.Context, denom string) (banktypes.Metadata, bool)
+	BurnCoins(ctx sdk.Context, moduleName string, amt sdk.Coins) error
 }