Start on insurance fund implementation #75

Kay-Zee · 2025-12-12T05:16:44Z

Closes: #84

Description

Implementation of insurance fund

For contributor use:

Targeted PR against master branch
Linked to Github issue with discussion and accepted design OR link to spec that describes this work.
Code follows the standards mentioned here.
Updated relevant documentation
Re-reviewed Files changed in the Github PR explorer
Added appropriate labels

cadence/contracts/FlowCreditMarket.cdc

Co-authored-by: Bastian Müller <bastian@turbolent.com>

cadence/contracts/FlowCreditMarket.cdc

vishalchangrani · 2026-01-07T16:26:39Z

Tracked by Issue: #84

mts1715 · 2026-01-07T19:10:57Z

docs/interest_rate_and_insurance_mechanism.md

+debitIncome = totalDebitBalance * debitRate
+insuranceAmount = totalCreditBalance * insuranceRate
+creditRate = (debitIncome - insuranceAmount) / totalCreditBalance


More clearly:
creditRate = debitRate * (totalDebitBalance / totalCreditBalance) - insuranceRate

Co-authored-by: Bastian Müller <bastian@turbolent.com>

…und balance

…_exists; transaction: collect_insurance

Added mock: set_insurance_swapper_mock.cdc

…saction. Moved flowTokenIdentifier to test_helpers.

…ce...

UlyanaAndrukhiv · 2026-01-15T17:23:23Z

cadence/contracts/FlowCreditMarket.cdc

+            let yearsElapsed = UFix128(timeElapsed) / FlowCreditMarket.secondsInYear
+            let insuranceRate = UFix128(self.insuranceRate)
+            // Insurance amount is a percentage of total credit balance per year
+            let insuranceAmount = self.totalCreditBalance * insuranceRate * yearsElapsed


@Kay-Zee, I noticed a comment on similar code in another PR about updating this calculation. I just want to flag that we're using totalCreditBalance here.

Could you clarify please if the calculation change should apply here as well, or if this implementation is correct?
If there's a doc with the expected calculations, could you share it so I can verify everything.

Yes the calculation change should be applied here as well. Since previously that implementation would be a flat rate charged on all borrows instead of it being the desired proportional fee collection.

In the current PR, we won't fix this because we found a problem with the calculation of perSecondInterestRate that should be fixed in this task.
Later, the current calculation issue will be fixed in this PR.

Сurrently it is partially fixed - replaced self.totalCreditBalance by self.totalDebitBalance - still wrong, but tests updated to create "borrows" in order to calculate it insurance.

Is it ok to merge current PR? or described problem above should be fixed first?
@Kay-Zee @liobrasil @Gornutz

jordanschalm

Reviewed changes to FlowCreditMarket

cadence/contracts/FlowCreditMarket.cdc

…according to comment

…dded more tests

…ranceRate * yearsElapsed

Kay-Zee

Mostly, nit's generally, looks good.

Kay-Zee · 2026-01-19T18:34:40Z

cadence/contracts/FlowCreditMarket.cdc

+                assert(swapper.outType() == Type<@MOET.Vault>(), message: "Swapper output type must be MOET")
+
+            } else {
+                // cannot remove swapper if insurance rate > 0


The other choice here would be to set the insurance rate to 0 on removal.

Honestly, not sure exactly which way is best, probably what you all have now where you have to explicitly set the insurance rate and then remove the swapper. With that said, i feel like this won't be a common operation so probably either option is fine.

I chose current approach to keep the two configurations separate. This way governance actions are more predictable and each change is clear.

Kay-Zee · 2026-01-19T18:38:44Z

cadence/tests/transactions/flow-credit-market/pool-governance/remove_insurance_swapper.cdc

+    }
+
+    execute {
+        self.pool.setInsuranceSwapper(tokenType: self.tokenType, swapper: nil)


If we decide not to "auto" set insurance rate to zero, then i think the "base" tx here should set the insurance rate to 0 before removing the swapper, to showcase the correct way to do it.

I’ve addressed this by splitting the behavior into two transactions and adding explicit documentation to each to clarify their intended usage in bba6631:

I added a base governance transaction at
./cadence/transactions/flow-credit-market/pool-governance/remove_insurance_swapper.cdc
which explicitly sets the insurance rate to 0.0 before removing the swapper. This showcases the correct and safe way to disable insurance when the protocol does not auto-zero the rate.

I left the transaction without setting the insurance rate in
./cadence/tests/transactions/flow-credit-market/pool-governance/remove_insurance_swapper.cdc
for testing purposes only. This version is used to validate failure scenarios and invariants when an insurance rate is still set and greater than zero.

This keeps the flow explicit and safe, while still allowing tests to cover the edge case where the swapper is removed without first disabling the insurance rate.

cadence/tests/insurance_collection_formula_test.cdc

cadence/tests/insurance_collection_test.cdc

cadence/tests/interest_accrual_integration_test.cdc

docs/interest_rate_and_insurance_mechanism.md

Gornutz

Following the small suggestions from @Kay-Zee outside of that, nothing else stands out to me.

cadence/tests/interest_curve_advanced_test.cdc

cadence/tests/governance_parameters_test.cdc

cadence/tests/interest_accrual_integration_test.cdc

Co-authored-by: Gornutz <90406700+Gornutz@users.noreply.github.com> Co-authored-by: Kan Zhang <kan.zhang@flowfoundation.com>

…/FlowCreditMarket into kan/insurance-rate-stability-rate

liobrasil · 2026-01-20T18:57:29Z

cadence/contracts/FlowCreditMarket.cdc

+            let insuranceAmountUFix64 = FlowCreditMarketMath.toUFix64RoundDown(insuranceAmount)
+
+            // If calculated amount is zero or negative, skip collection but update timestamp
+            if insuranceAmountUFix64 <= 0.0 {


UFix64 can't be negative

liobrasil · 2026-01-20T19:38:06Z

cadence/contracts/FlowCreditMarket.cdc

        }
+
+        /// Collects insurance by withdrawing from reserves and swapping to MOET.
+        /// The insurance amount is calculated based on the insurance rate applied to the total credit balance over the time elapsed.


insurance rate applies to the total debit balance (not credit)

Start on interest rate implementation

2a25344

turbolent reviewed Dec 18, 2025

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Kay-Zee and others added 2 commits December 23, 2025 15:37

Apply suggestions from code review

41e0aff

Co-authored-by: Bastian Müller <bastian@turbolent.com>

Merge branch 'main' into kan/insurance-rate-stability-rate

1e0f9a1

turbolent reviewed Dec 24, 2025

View reviewed changes

Kay-Zee changed the title ~~Start on interest rate implementation~~ Start on insurance fund implementation Dec 24, 2025

vishalchangrani mentioned this pull request Jan 7, 2026

Insurance fund implementation #84

Open

vishalchangrani mentioned this pull request Jan 7, 2026

Add stabilityFee parameter for Protocol Stability #85

Open

mts1715 reviewed Jan 7, 2026

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UlyanaAndrukhiv and others added 3 commits January 9, 2026 12:19

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5c285af

Co-authored-by: Bastian Müller <bastian@turbolent.com>

Merge branch 'main' into kan/insurance-rate-stability-rate

cb87534

Fixed errors in insurance rate implementation

ecd8c6f

UlyanaAndrukhiv assigned UlyanaAndrukhiv and mts1715 Jan 9, 2026

UlyanaAndrukhiv and others added 15 commits January 9, 2026 18:41

Added getInsuranceRate view. Added scripts for it and for insurance f…

044cb02

…und balance

Added set_insurance_swapper transaction

de5e054

Added scripts: get_last_insurance_collection, insurance_token_swapper…

29654cc

…_exists; transaction: collect_insurance

Added test helpers for instrance rate and insurance funds

c69be68

Merged with main

0653beb

Added test helper functions: setInsuranceSwapper, collectInsurance

f5a393b

Added mock: set_insurance_swapper_mock.cdc

Added tests for interest rate

1607037

Ranamed test file

68bc8f5

Added tx: remove_insurance_swapper, added more test helpers

531d1e7

Updated test_helpers and fixed tests

d7580f1

Added basic set_insurance_swapper tests, updated insurance_rate_tests

2710f41

Added more test cases for set insurance swapper. Refactored test tran…

3f80ffe

…saction. Moved flowTokenIdentifier to test_helpers.

Added basic test for insurance funds, updated test helpers

b454579

added insurance_collection_test: Collection Edge Cases

b141073

added test_collectInsurance_success_fullAmount

9d577e2

mts1715 and others added 7 commits January 15, 2026 15:21

fix tests names

0888833

undo changes at perSecondInterestRate

bbe88e5

Added events for insurance impl

039e8bb

Merged

5870767

Added more test cases

a31ea8d

comments fixes, some asserts were added

d685b52

replaced assertEqualWithVariance by Test.assert(ufixEqualWithinVarian…

98fdb6b

…ce...

mts1715 marked this pull request as ready for review January 15, 2026 16:57

mts1715 requested a review from a team as a code owner January 15, 2026 16:57

UlyanaAndrukhiv requested a review from turbolent January 15, 2026 16:59

UlyanaAndrukhiv reviewed Jan 15, 2026

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jordanschalm reviewed Jan 15, 2026

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UlyanaAndrukhiv and others added 6 commits January 16, 2026 14:28

Updated checks and doc according to comments

294a0ff

Ranamed variable, methods and helpers to lastInsuranceCollectionTime …

87c713b

…according to comment

fix for test_collectInsurance_success_fullAmount: fixes for time passed

0fa00e8

Updated contract configuration. Added checks according to comments. A…

f887a90

…dded more tests

Added more tests

2af76fa

fix insurance calculation: insuranceAmount = totalDebitBalance * insu…

0da7dfe

…ranceRate * yearsElapsed

Kay-Zee commented Jan 19, 2026

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Gornutz reviewed Jan 19, 2026

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UlyanaAndrukhiv and others added 8 commits January 20, 2026 11:40

Apply suggestions from code review

84782c2

Co-authored-by: Gornutz <90406700+Gornutz@users.noreply.github.com> Co-authored-by: Kan Zhang <kan.zhang@flowfoundation.com>

Create secondsInDay const, updated tests

529d940

Merge branch 'kan/insurance-rate-stability-rate' of github.com:onflow…

e50c1a4

…/FlowCreditMarket into kan/insurance-rate-stability-rate

Updated tests to use assetEqual

792e476

Updated docs

f9a5bc2

Removed unnecessary test case for collect insurance fee

62cfe83

Adedd base tx for removing swapper

bba6631

Removed tolerance from test_collectInsurance_success_fullAmount

7debd5c

liobrasil reviewed Jan 20, 2026

View reviewed changes

Start on insurance fund implementation #75

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Start on insurance fund implementation #75

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Kay-Zee commented Dec 12, 2025 •

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