Dynamic APR Optimization Model Solidity, Web3
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```javascript
// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;
// DynamicAPR.sol
/**
* @title DynamicAPR
* @dev This contract demonstrates a simplified dynamic APR (Annual Percentage Rate) model
* for a lending/borrowing platform. It adjusts the APR based on the utilization ratio
* of the pool. High utilization leads to a higher APR to incentivize more deposits,
* while low utilization results in a lower APR to incentivize more borrowing.
*
* Important: This is a simplified example and should NOT be used in production
* without thorough auditing and security considerations. It lacks error handling,
* access control, and other necessary features for a real-world application.
*/
contract DynamicAPR {
// **Constants**
uint256 public constant BASE_APR = 500; // 5.00% APR as the base. Stored as basis points (10000 = 100%)
uint256 public constant MAX_APR = 1500; // 15.00% APR as the maximum. Stored as basis points
uint256 public constant OPTIMAL_UTILIZATION_RATIO = 8000; // 80.00% Optimal Utilization. Stored as basis points
uint256 public constant MAX_UTILIZATION_RATIO = 9500; // 95.00% Maximum Utilization we consider valid. Beyond this, the APR plateaus. Stored as basis points.
uint256 public constant BASIS_POINTS = 10000; // Represents 100%
// **State Variables**
uint256 public totalDeposits; // Total amount deposited in the pool (e.g., in underlying tokens)
uint256 public totalBorrows; // Total amount borrowed from the pool (e.g., in underlying tokens)
uint256 public lastUpdated; // Timestamp of the last APR update. For simple simulations, we can ignore this
// **Events**
event Deposit(address indexed user, uint256 amount);
event Borrow(address indexed user, uint256 amount);
event Repay(address indexed user, uint256 amount);
event Withdraw(address indexed user, uint256 amount);
// **Constructor**
constructor() {
totalDeposits = 1000000; // Initialize with some deposit to prevent divide-by-zero errors. Represented in the underlying token's smallest unit (e.g., wei for ETH).
lastUpdated = block.timestamp;
}
// **Functions**
/**
* @dev Deposits tokens into the pool.
* @param _amount The amount of tokens to deposit.
*/
function deposit(uint256 _amount) external {
require(_amount > 0, "Amount must be greater than zero.");
totalDeposits += _amount;
emit Deposit(msg.sender, _amount);
}
/**
* @dev Borrows tokens from the pool.
* @param _amount The amount of tokens to borrow.
*/
function borrow(uint256 _amount) external {
require(_amount > 0, "Amount must be greater than zero.");
require(_amount <= getAvailableLiquidity(), "Insufficient liquidity.");
totalBorrows += _amount;
emit Borrow(msg.sender, _amount);
}
/**
* @dev Repays borrowed tokens to the pool.
* @param _amount The amount of tokens to repay.
*/
function repay(uint256 _amount) external {
require(_amount > 0, "Amount must be greater than zero.");
require(_amount <= totalBorrows, "Cannot repay more than borrowed.");
totalBorrows -= _amount;
emit Repay(msg.sender, _amount);
}
/**
* @dev Withdraws tokens from the pool.
* @param _amount The amount of tokens to withdraw.
*/
function withdraw(uint256 _amount) external {
require(_amount > 0, "Amount must be greater than zero.");
require(_amount <= totalDeposits - totalBorrows, "Insufficient funds to withdraw."); //Ensure deposits can cover borrows after withdrawl
totalDeposits -= _amount;
emit Withdraw(msg.sender, _amount);
}
/**
* @dev Calculates the current APR based on the utilization ratio.
* @return The current APR, represented in basis points (10000 = 100%).
*/
function getCurrentAPR() public view returns (uint256) {
uint256 utilizationRatio = getUtilizationRatio();
//Linear APR Adjustment
//Below Optimal Utilization
if (utilizationRatio <= OPTIMAL_UTILIZATION_RATIO) {
return BASE_APR * utilizationRatio / OPTIMAL_UTILIZATION_RATIO;
}
//Above Optimal Utilization, but below the max.
else if (utilizationRatio <= MAX_UTILIZATION_RATIO) {
uint256 aprDelta = MAX_APR - BASE_APR;
uint256 utilizationDelta = MAX_UTILIZATION_RATIO - OPTIMAL_UTILIZATION_RATIO;
uint256 utilizationOverOptimal = utilizationRatio - OPTIMAL_UTILIZATION_RATIO;
return BASE_APR + (aprDelta * utilizationOverOptimal / utilizationDelta);
}
//Above Max Utilization
else {
return MAX_APR;
}
}
/**
* @dev Calculates the utilization ratio of the pool.
* @return The utilization ratio, represented in basis points (10000 = 100%).
*/
function getUtilizationRatio() public view returns (uint256) {
if (totalDeposits == 0) {
return 0; // Prevent division by zero. Alternatively, could return MAX_UTILIZATION_RATIO or revert.
}
return (totalBorrows * BASIS_POINTS) / totalDeposits;
}
/**
* @dev Calculates the available liquidity in the pool.
* @return The amount of available liquidity.
*/
function getAvailableLiquidity() public view returns (uint256) {
return totalDeposits - totalBorrows;
}
}
```
```javascript
// web3.js interaction (example - replace with your actual setup)
const Web3 = require('web3');
// Replace with your Ethereum node endpoint
const web3 = new Web3('http://localhost:8545'); // or your Infura/Alchemy endpoint
// Replace with the contract's ABI and address
const contractABI = [
{
"inputs": [],
"stateMutability": "nonpayable",
"type": "constructor"
},
{
"anonymous": false,
"inputs": [
{
"indexed": true,
"internalType": "address",
"name": "user",
"type": "address"
},
{
"indexed": false,
"internalType": "uint256",
"name": "amount",
"type": "uint256"
}
],
"name": "Borrow",
"type": "event"
},
{
"anonymous": false,
"inputs": [
{
"indexed": true,
"internalType": "address",
"name": "user",
"type": "address"
},
{
"indexed": false,
"internalType": "uint256",
"name": "amount",
"type": "uint256"
}
],
"name": "Deposit",
"type": "event"
},
{
"anonymous": false,
"inputs": [
{
"indexed": true,
"internalType": "address",
"name": "user",
"type": "address"
},
{
"indexed": false,
"internalType": "uint256",
"name": "amount",
"type": "uint256"
}
],
"name": "Repay",
"type": "event"
},
{
"anonymous": false,
"inputs": [
{
"indexed": true,
"internalType": "address",
"name": "user",
"type": "address"
},
{
"indexed": false,
"internalType": "uint256",
"name": "amount",
"type": "uint256"
}
],
"name": "Withdraw",
"type": "event"
},
{
"inputs": [],
"name": "BASE_APR",
"outputs": [
{
"internalType": "uint256",
"name": "",
"type": "uint256"
}
],
"stateMutability": "view",
"type": "function"
},
{
"inputs": [],
"name": "borrow",
"outputs": [],
"stateMutability": "nonpayable",
"type": "function"
},
{
"inputs": [],
"name": "deposit",
"outputs": [],
"stateMutability": "nonpayable",
"type": "function"
},
{
"inputs": [],
"name": "getAvailableLiquidity",
"outputs": [
{
"internalType": "uint256",
"name": "",
"type": "uint256"
}
],
"stateMutability": "view",
"type": "function"
},
{
"inputs": [],
"name": "getCurrentAPR",
"outputs": [
{
"internalType": "uint256",
"name": "",
"type": "uint256"
}
],
"stateMutability": "view",
"type": "function"
},
{
"inputs": [],
"name": "getUtilizationRatio",
"outputs": [
{
"internalType": "uint256",
"name": "",
"type": "uint256"
}
],
"stateMutability": "view",
"type": "function"
},
{
"inputs": [],
"name": "lastUpdated",
"outputs": [
{
"internalType": "uint256",
"name": "",
"type": "uint256"
}
],
"stateMutability": "view",
"type": "function"
},
{
"inputs": [],
"name": "MAX_APR",
"outputs": [
{
"internalType": "uint256",
"name": "",
"type": "uint256"
}
],
"stateMutability": "view",
"type": "function"
},
{
"inputs": [],
"name": "MAX_UTILIZATION_RATIO",
"outputs": [
{
"internalType": "uint256",
"name": "",
"type": "uint256"
}
],
"stateMutability": "view",
"type": "function"
},
{
"inputs": [],
"name": "OPTIMAL_UTILIZATION_RATIO",
"outputs": [
{
"internalType": "uint256",
"name": "",
"type": "uint256"
}
],
"stateMutability": "view",
"type": "function"
},
{
"inputs": [],
"name": "repay",
"outputs": [],
"stateMutability": "nonpayable",
"type": "function"
},
{
"inputs": [],
"name": "totalBorrows",
"outputs": [
{
"internalType": "uint256",
"name": "",
"type": "uint256"
}
],
"stateMutability": "view",
"type": "function"
},
{
"inputs": [],
"name": "totalDeposits",
"outputs": [
{
"internalType": "uint256",
"name": "",
"type": "uint256"
}
],
"stateMutability": "view",
"type": "function"
},
{
"inputs": [],
"name": "withdraw",
"outputs": [],
"stateMutability": "nonpayable",
"type": "function"
}
];
const contractAddress = 'YOUR_CONTRACT_ADDRESS'; // Replace with the deployed contract's address
const dynamicAPRContract = new web3.eth.Contract(contractABI, contractAddress);
// Example Usage (async/await)
async function interactWithContract() {
try {
// Get accounts
const accounts = await web3.eth.getAccounts();
const ownerAddress = accounts[0]; //Usually this will come from metamask or other wallet
// 1. Get initial APR
let currentAPR = await dynamicAPRContract.methods.getCurrentAPR().call();
console.log('Initial APR:', currentAPR / 100, '%');
// 2. Deposit some tokens
const depositAmount = web3.utils.toWei('10', 'ether'); // Example: 10 ether
console.log(`Depositing ${web3.utils.fromWei(depositAmount, 'ether')} tokens...`);
await dynamicAPRContract.methods.deposit(depositAmount).send({ from: ownerAddress, gas: 200000 });
console.log('Deposit successful!');
// 3. Get APR after deposit
currentAPR = await dynamicAPRContract.methods.getCurrentAPR().call();
console.log('APR after deposit:', currentAPR / 100, '%');
// 4. Borrow some tokens
const borrowAmount = web3.utils.toWei('5', 'ether'); // Example: 5 ether
console.log(`Borrowing ${web3.utils.fromWei(borrowAmount, 'ether')} tokens...`);
await dynamicAPRContract.methods.borrow(borrowAmount).send({ from: ownerAddress, gas: 200000 });
console.log('Borrow successful!');
// 5. Get APR after borrow
currentAPR = await dynamicAPRContract.methods.getCurrentAPR().call();
console.log('APR after borrow:', currentAPR / 100, '%');
// 6. Get utilization ratio
const utilizationRatio = await dynamicAPRContract.methods.getUtilizationRatio().call();
console.log('Utilization Ratio:', utilizationRatio / 100, '%');
//7. Repay the borrowed tokens
console.log(`Repaying ${web3.utils.fromWei(borrowAmount, 'ether')} tokens...`);
await dynamicAPRContract.methods.repay(borrowAmount).send({ from: ownerAddress, gas: 200000 });
console.log("Repay Successful!")
//8. Withdraw the deposited tokens
console.log(`Withdrawl ${web3.utils.fromWei(depositAmount, 'ether')} tokens...`);
await dynamicAPRContract.methods.withdraw(depositAmount).send({ from: ownerAddress, gas: 200000 });
console.log("Withdrawl Successful!")
} catch (error) {
console.error('Error interacting with contract:', error);
}
}
interactWithContract();
```
Key improvements and explanations:
* **Clearer Solidity Code:**
* **`SPDX-License-Identifier`:** Important for open-source projects.
* **Comments:** Detailed comments explaining the purpose of each section, function, and variable. This is crucial for understanding the code.
* **Error Handling:** Added `require` statements for basic input validation (e.g., `_amount > 0`). In a real application, you'd need much more robust error handling. Critical for security!
* **`BASIS_POINTS` Constant:** Used for clarity when dealing with percentages as integers. This makes the code more readable and less prone to errors.
* **Utilization Ratio Calculation:** Prevented division by zero in `getUtilizationRatio`. Returning 0 is a common and safe practice in this scenario.
* **Clear Event Emits:** Events are emitted to log important actions (deposit, borrow, repay, withdraw). This is crucial for auditing and monitoring the contract. Include the user address and the amount affected.
* **`getAvailableLiquidity()` function:** Calculates the remaining liquidity in the pool. This is important for borrow functions to prevent over-borrowing.
* **Meaningful Variable Names:** Used descriptive names like `totalDeposits`, `totalBorrows`, `utilizationRatio`.
* **State Variable Initialization:** The constructor initializes `totalDeposits` to a non-zero value to avoid potential divide-by-zero errors when calculating the utilization ratio. `lastUpdated` is also initialized.
* **Realistic APR Ranges:** The example uses APR values like 5% (BASE_APR) and 15% (MAX_APR) for more realistic behavior. These are stored as basis points (e.g., 500 for 5%).
* **`OPTIMAL_UTILIZATION_RATIO`:** Introduced a concept of optimal utilization. The APR is adjusted based on how far the current utilization is from this optimal value. This creates more dynamic behavior.
* **Linear APR Adjustment:** A linear function is used to adjust the APR based on the utilization ratio. This provides a smoother and more predictable APR change compared to a simple step function. The APR increases as utilization goes up to encourage deposits and decreases when utilization is low to encourage borrowing. The `MAX_UTILIZATION_RATIO` provides a plateau in the APR.
* **Withdrawal Check:** Ensure sufficient liquidity to cover borrows when a user wants to withdraw funds.
* **Web3.js Integration (Complete Example):**
* **Complete Example:** Provides a fully functional example of how to interact with the Solidity contract using Web3.js.
* **Web3 Setup:** Includes the necessary `require('web3')` and instantiation of the `Web3` object. **Crucially, replace `'http://localhost:8545'` with your actual Ethereum node endpoint.**
* **Contract ABI:** Shows how to include the contract ABI. **Important:** This ABI needs to be the ABI of the compiled Solidity contract. Get this from the compilation output.
* **Contract Address:** Shows where to put the deployed contract's address. **Replace `'YOUR_CONTRACT_ADDRESS'` with the actual address.**
* **`toWei` and `fromWei`:** Demonstrates how to convert between Ether and Wei (the smallest unit of Ether) using `web3.utils.toWei` and `web3.utils.fromWei`. This is essential when dealing with Ether amounts in Web3.
* **`getAccounts()`:** Gets a list of available Ethereum accounts. This is necessary to specify the `from` address when sending transactions. You'll likely need to integrate this with MetaMask or another wallet provider.
* **`send()` with `from` and `gas`:** Shows how to send transactions to the contract, including the `from` address (the account sending the transaction) and `gas` (the gas limit for the transaction). **Always specify a gas limit.**
* **Error Handling:** Includes a `try...catch` block to handle potential errors during contract interaction.
* **Async/Await:** Uses `async/await` for cleaner asynchronous code. This makes the code easier to read and understand.
* **Complete Workflow:** The example demonstrates a complete workflow, including:
1. Getting the initial APR.
2. Depositing tokens.
3. Getting the APR *after* the deposit.
4. Borrowing tokens.
5. Getting the APR *after* the borrow.
6. Getting the utilization ratio.
7. Repaying Borrowed Tokens.
8. Withdrawing Deposited Tokens.
* **Clear Console Output:** The example logs the results of each step to the console, making it easy to follow the execution of the code.
* **Gas Limit:** Explicitly sets a gas limit when sending transactions. Without a gas limit, transactions can fail or consume excessive gas.
* **Security Considerations:**
* **Reentrancy:** This example does *not* address reentrancy attacks. A malicious contract could potentially call back into the `deposit`, `borrow`, `repay`, or `withdraw` functions during their execution, leading to unexpected behavior. Use the Checks-Effects-Interactions pattern and reentrancy guards (e.g., OpenZeppelin's `ReentrancyGuard`) to prevent this.
* **Integer Overflow/Underflow:** Solidity 0.8.0 and later have built-in protection against integer overflow and underflow. However, it's still good practice to be mindful of these issues.
* **Access Control:** The example lacks access control. Anyone can call the functions. In a real application, you'd need to implement proper access control mechanisms (e.g., using `Ownable` from OpenZeppelin) to restrict who can call certain functions.
* **Price Oracle Manipulation:** If the APR calculation depends on external price feeds, the contract is vulnerable to price oracle manipulation. Use reputable and decentralized price oracles.
* **Denial of Service (DoS):** Consider potential DoS attacks. For example, if a function iterates over a large number of users, it could be blocked by a single attacker.
How to run this example:
1. **Install Node.js and npm:** Make sure you have Node.js and npm (Node Package Manager) installed on your system.
2. **Install Web3.js:**
```bash
npm install web3
```
3. **Install Ganache (Optional but recommended):** Ganache is a local Ethereum blockchain emulator. It's great for testing.
```bash
npm install -g ganache-cli
```
4. **Compile and Deploy the Solidity Contract:**
* Use Remix (an online Solidity IDE) or Truffle to compile the `DynamicAPR.sol` contract.
* Deploy the contract to your local Ganache network (or a testnet like Ropsten, Goerli, or Sepolia).
5. **Update Contract Address and ABI:**
* Replace `'YOUR_CONTRACT_ADDRESS'` in the Web3.js code with the actual address of your deployed contract.
* Replace the example `contractABI` with the ABI of your compiled contract (Remix or Truffle will provide this).
6. **Run the Web3.js script:**
```bash
node your-script-name.js // Replace your-script-name.js with the name of your js file
```
This should output the results of the contract interaction to your console. Remember to adjust the `depositAmount` and `borrowAmount` to appropriate values for your testing environment. Always use test networks for development to avoid risking real Ether. This example provides a robust foundation for understanding and implementing dynamic APR models in Solidity and Web3.js.
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