Standalone line of credit

What is the Problem Being Solved?

We need a way to generate RUN in the mainnet0 timeframe. Some accounts will have BLD, and no fees will be charged yet.

Description of the Design

• Tweak the existing x/lien module to serve as the source-of-truth for liens.
  • Add compare-and-swap fields in SetLien request.
• Add a command for taking a line of credit in RUN against BLD in one’s own account.
  • Required collateralization rate specified in module parameters, modifiable by governance.
  • Module must be able to mint RUN.
• Same command can repay the LoC, lifting the lien.
  • Need to establish behavior when multiple LoCs are present with different collateralization rates.
• Switches over to JS-controlled LoC system in mainnet1
  • Need to be able to disable standalone LoC creation
  • JS needs to be able to initialize LoC state from existing standalone LoCs.

Security Considerations

Must ensure conservation of liened BLD vs RUN.

Test Plan

Unit tests.

Manual testing on testnet:

• cannot take nonzero LoC without BLD
• produced RUN is transferrable
• liened BLD is not
• can change collateralization ratio
• payoff works

[JimLarson]

Draft interface:

Golang keeper API:

GetLoC(ctx sdk.Context, addr sdk.AccAddress) (collateral, loan sdk.Coins)
SetLoC(ctx sdk.Context, addr sdk.AccAddress, oldCollateral, oldLoan, newCollateral, newLoan sdk.Coins) error

GetLoC() returns zero amounts if no LoC is present.

The SetLoC() call has several checks and effects:

• The old amounts in SetLoC() must match the current LoC state.
• In “standalone” mode, the new collateral/loan ratio must match the configured ratio. In JS-master mode, the given amounts are assumed to be correct.
• If the loan amount is increasing, the new collateral must not be greater than the amount in the given account. However, if the loan is being paid down, it is okay to not have the new required collateral available: the account becomes “under water” from a lien perspective, but you can always pay down a loan.
• The lien is set to the new collateral amount.
• If the loan is increasing, the increment is minted and added to the account. If the loan is decreasing, the decrement is removed from the account and burned. There must be enough of the loan denomination available to do this.

The configuration will specify the size of loan that can be taken for one unit of collateral, specifying both denominations. In the expected case of a RUN LoC on BLD, this gives an amount of RUN per liened BLD, which should be more immediately legible than the inverse price of BLD.

Question: should we specialize the API to list loan and collateral to sdk.Coin? This would simplify the configuration and the JSON messages.

[JimLarson]

Check with @dtribble as to whether this is a change to mainnet 0 scope, or just a feature that didn’t get top billing.