Aloe II Protocol Liquidator

Liquidates undercollateralized Aloe II Borrower accounts using UniswapV3 flash swaps as a source of capital.

Disclaimer

Aloe Labs is not responsible for any losses incurred by using this software. Use at your own risk. This is experimental software and is provided as-is, without warranty of any kind, express or implied.

Usage

Setup

Before running, be sure to create a .env file in the app/ directory that contains the fields specified by the .env.template.

Run without Docker

You must have NodeJS and Typescript installed. Run yarn start from the app/ directory.

Run with Docker

You must have a running docker engine.

1. Build the image with docker build -t liquidator . from within the app/ directory.
2. docker run --name <CONTAINER-NAME> -i -t liquidator:latest yarn start to run the liquidator from a docker container.
3. NOTE: to stop, simply pressing Ctrl + C will not stop the liquidator container from running! You need to run docker stop <CONTAINER-NAME>.

High-level Overview

Specifies a POLLING_INTERVAL in index.ts which generates a list of all the Borrowers on the protocol every POLLING_INTERVAL seconds.

1. Checks if a borrower is insolvent by estimating the gas when calling the Liquidator's liquidate method on the borrower.
   1. If the gas estimate returns a value greater than 0, the borrower is deemed insolvent and is sent to the TXManager to be liquidated.
   2. If gas estimate returns an error, the borrower is deemed solvent.
2. TXManager attempts liquidation. If it fails, retries with a gas cost that is 10% higher than the previous amount.

Notes

Node Provider

This implementation connects to an Alchemy node using a websocket connection. If you'd like to use a different node provider, change the following line:

const OPTIMISM_ALCHEMY_URL = `wss://opt-mainnet.g.alchemy.com/v2/${process.env.ALCHEMY_API_KEY!}`;

in the app/index.ts file to:

const NODE_PROVIDER_URL = <NODE-PROVIDER-URL>;

and the following line:

let provider = new Web3.providers.WebsocketProvider(OPTIMISM_ALCHEMY_URL, {...});

to

let provider = new Web3.providers.WebsocketProvider(NODE_PROVIDER_URL, {...});

Note: the change shown above assumes that the NODE-PROVIDER-URL begins with a wss because we use a WebsocketProvider. If you'd like to connect to your node provider using a different protocol (eg. IPC or http) you'll have to change new Web3.providers.WebsocketProvider to the corresponding protocol.

Environment Variables

Name	Description
WALLET_ADDRESS	Required. Address which receives the liquidation reward on success.
WALLET_PRIVATE_KEY	Required. Used by the TXManager to create the Account object that sends and signs liquidation transactions.
ALCHEMY_API_KEY	Required Used to initialize the Web3 client that gets information from the blockchain and sends transactions. This implementation uses Alchemy as the node provider, if you want to use a different node provider, see sub section Node Provider.
FACTORY_ADDRESS	Required. Address of the Aloe II Factory that is responsible for creating borrowers.
CREATE_ACCOUNT_TOPIC_ID	Required. Specifies the topic that provides the address of the newly created borrower.
LIQUIDATOR_ADDRESS	Required. Address of the liquidator contract on-chain. See app/addresses.md for details.
SLACK_WEBHOOK0, SLACK_WEBHOOK1, SLACK_WEBHOOK2	Required, if using Slack to receive messages. Webhooks are of the form https://hooks.slack.com/services/<SLACK_WEBHOOK0>/<SLACK_WEBHOOK1>/<SLACK_WEBHOOK2>. We pass in the parts of the webhook this way because of the way .env deals with links. If either SLACK_WEBHOOK0, SLACK_WEBHOOK1, or SLACK_WEBHOOK2 is not provided, then we log an error message to the console and exit with code 1.