program: add recenter amm ix (#836)

* bigz/add-amm-recenter-fcn * add recenter-amm-2 test * passing recenter_amm_2 test * add test_move_amm test * update todo msg * add to adminClient * add get_lower_bound_sqrt_k functor * CHANGELOG --------- Co-authored-by: Chris Heaney <[email protected]>
drift-labs · Jan 26, 2024 · 2223241 · 2223241
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commit 2223241
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diff --git a/CHANGELOG.md b/CHANGELOG.md
@@ -9,9 +9,9 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ### Features
 
-### Fixes
+- program: add recenter amm ix ([#836](https://github.com/drift-labs/protocol-v2/pull/836))
 
-- program: enable jit maker to fill same slot as taker placed ([#835](https://github.com/drift-labs/protocol-v2/pull/835))
+### Fixes
 
 ### Breaking
 

diff --git a/programs/drift/src/controller/amm.rs b/programs/drift/src/controller/amm.rs
@@ -745,10 +745,63 @@ pub fn move_price(
     validate!(
         (quote_asset_reserve.cast::<i128>()? - amm.quote_asset_reserve.cast::<i128>()?).abs() < 100,
         ErrorCode::InvalidAmmDetected,
+        "quote_asset_reserve passed doesnt reconcile enough {} vs {}",
+        quote_asset_reserve.cast::<i128>()?,
+        amm.quote_asset_reserve.cast::<i128>()?
+    )?;
+
+    amm.sqrt_k = sqrt_k;
+
+    let (_, terminal_quote_reserves, terminal_base_reserves) =
+        amm::calculate_terminal_price_and_reserves(amm)?;
+    amm.terminal_quote_asset_reserve = terminal_quote_reserves;
+
+    let (min_base_asset_reserve, max_base_asset_reserve) =
+        amm::calculate_bid_ask_bounds(amm.concentration_coef, terminal_base_reserves)?;
+
+    amm.max_base_asset_reserve = max_base_asset_reserve;
+    amm.min_base_asset_reserve = min_base_asset_reserve;
+
+    let reserve_price_after = amm.reserve_price()?;
+    update_spreads(amm, reserve_price_after)?;
+
+    Ok(())
+}
+
+// recenter peg with balanced terminal reserves
+pub fn recenter_perp_market_amm(amm: &mut AMM, peg_multiplier: u128, sqrt_k: u128) -> DriftResult {
+    // calculate base/quote reserves for balanced terminal reserves
+    let swap_direction = if amm.base_asset_amount_with_amm > 0 {
+        SwapDirection::Remove
+    } else {
+        SwapDirection::Add
+    };
+    let (new_quote_asset_amount, new_base_asset_amount) = amm::calculate_swap_output(
+        amm.base_asset_amount_with_amm.unsigned_abs(),
+        sqrt_k,
+        swap_direction,
+        sqrt_k,
+    )?;
+
+    amm.base_asset_reserve = new_base_asset_amount;
+
+    let k = bn::U256::from(sqrt_k).safe_mul(bn::U256::from(sqrt_k))?;
+
+    amm.quote_asset_reserve = k
+        .safe_div(bn::U256::from(new_base_asset_amount))?
+        .try_to_u128()?;
+
+    validate!(
+        (new_quote_asset_amount.cast::<i128>()? - amm.quote_asset_reserve.cast::<i128>()?).abs()
+            < 100,
+        ErrorCode::InvalidAmmDetected,
         "quote_asset_reserve passed doesnt reconcile enough"
     )?;
 
     amm.sqrt_k = sqrt_k;
+    // todo: could calcualte terminal state cost for altering sqrt_k
+
+    amm.peg_multiplier = peg_multiplier;
 
     let (_, terminal_quote_reserves, terminal_base_reserves) =
         amm::calculate_terminal_price_and_reserves(amm)?;

diff --git a/programs/drift/src/controller/position/tests.rs b/programs/drift/src/controller/position/tests.rs
diff --git a/programs/drift/src/instructions/admin.rs b/programs/drift/src/instructions/admin.rs
@@ -867,6 +867,21 @@ pub fn handle_move_amm_price(
     Ok(())
 }
 
+#[access_control(
+    perp_market_valid(&ctx.accounts.perp_market)
+)]
+pub fn handle_recenter_perp_market_amm(
+    ctx: Context<AdminUpdatePerpMarket>,
+    peg_multiplier: u128,
+    sqrt_k: u128,
+) -> Result<()> {
+    let perp_market = &mut load_mut!(ctx.accounts.perp_market)?;
+    controller::amm::recenter_perp_market_amm(&mut perp_market.amm, peg_multiplier, sqrt_k)?;
+    validate_perp_market(perp_market)?;
+
+    Ok(())
+}
+
 #[access_control(
     perp_market_valid(&ctx.accounts.perp_market)
 )]
@@ -1166,7 +1181,7 @@ pub fn handle_update_k(ctx: Context<AdminUpdateK>, sqrt_k: u128) -> Result<()> {
 
     let update_k_result = get_update_k_result(perp_market, new_sqrt_k_u192, true)?;
 
-    let adjustment_cost = math::cp_curve::adjust_k_cost(perp_market, &update_k_result)?;
+    let adjustment_cost: i128 = math::cp_curve::adjust_k_cost(perp_market, &update_k_result)?;
 
     math::cp_curve::update_k(perp_market, &update_k_result)?;
 

diff --git a/programs/drift/src/lib.rs b/programs/drift/src/lib.rs
@@ -626,6 +626,14 @@ pub mod drift {
         handle_move_amm_price(ctx, base_asset_reserve, quote_asset_reserve, sqrt_k)
     }
 
+    pub fn recenter_perp_market_amm(
+        ctx: Context<AdminUpdatePerpMarket>,
+        peg_multiplier: u128,
+        sqrt_k: u128,
+    ) -> Result<()> {
+        handle_recenter_perp_market_amm(ctx, peg_multiplier, sqrt_k)
+    }
+
     pub fn update_perp_market_expiry(
         ctx: Context<AdminUpdatePerpMarket>,
         expiry_ts: i64,

diff --git a/programs/drift/src/math/repeg.rs b/programs/drift/src/math/repeg.rs
@@ -284,11 +284,14 @@ pub fn adjust_amm(
         let adjustment_cost: i128 = if adjust_k && can_lower_k {
             // TODO can be off by 1?
 
+            // always let protocol-owned sqrt_k be either least .1% of lps or the base amount / min order
+            let new_sqrt_k_lower_bound = market.amm.get_lower_bound_sqrt_k()?;
+
             let new_sqrt_k = market
                 .amm
                 .sqrt_k
                 .safe_sub(market.amm.sqrt_k.safe_div(1000)?)?
-                .max(market.amm.user_lp_shares.safe_add(1)?);
+                .max(new_sqrt_k_lower_bound);
 
             let update_k_result =
                 cp_curve::get_update_k_result(market, bn::U192::from(new_sqrt_k), true)?;

diff --git a/programs/drift/src/state/perp_market.rs b/programs/drift/src/state/perp_market.rs
@@ -826,6 +826,15 @@ impl AMM {
         }
     }
 
+    pub fn get_lower_bound_sqrt_k(self) -> DriftResult<u128> {
+        Ok(self.sqrt_k.min(
+            self.user_lp_shares
+                .safe_add(self.user_lp_shares.safe_div(1000)?)?
+                .max(self.min_order_size.cast()?)
+                .max(self.base_asset_amount_with_amm.unsigned_abs().cast()?),
+        ))
+    }
+
     pub fn get_protocol_owned_position(self) -> DriftResult<i64> {
         self.base_asset_amount_with_amm
             .safe_add(self.base_asset_amount_with_unsettled_lp)?

diff --git a/sdk/src/adminClient.ts b/sdk/src/adminClient.ts
@@ -358,6 +358,32 @@ export class AdminClient extends DriftClient {
 		return txSig;
 	}
 
+	public async recenterPerpMarketAmm(
+		perpMarketIndex: number,
+		pegMultiplier: BN,
+		sqrtK: BN
+	): Promise<TransactionSignature> {
+		const marketPublicKey = await getPerpMarketPublicKey(
+			this.program.programId,
+			perpMarketIndex
+		);
+
+		const tx = await this.program.transaction.recenterPerpMarketAmm(
+			pegMultiplier,
+			sqrtK,
+			{
+				accounts: {
+					state: await this.getStatePublicKey(),
+					admin: this.wallet.publicKey,
+					perpMarket: marketPublicKey,
+				},
+			}
+		);
+
+		const { txSig } = await this.sendTransaction(tx, [], this.opts);
+		return txSig;
+	}
+
 	public async updatePerpMarketConcentrationScale(
 		perpMarketIndex: number,
 		concentrationScale: BN

diff --git a/sdk/src/idl/drift.json b/sdk/src/idl/drift.json
@@ -2972,6 +2972,36 @@
         }
       ]
     },
+    {
+      "name": "recenterPerpMarketAmm",
+      "accounts": [
+        {
+          "name": "admin",
+          "isMut": false,
+          "isSigner": true
+        },
+        {
+          "name": "state",
+          "isMut": false,
+          "isSigner": false
+        },
+        {
+          "name": "perpMarket",
+          "isMut": true,
+          "isSigner": false
+        }
+      ],
+      "args": [
+        {
+          "name": "pegMultiplier",
+          "type": "u128"
+        },
+        {
+          "name": "sqrtK",
+          "type": "u128"
+        }
+      ]
+    },
     {
       "name": "updatePerpMarketExpiry",
       "accounts": [