CoW AMM: Price impact information on deposit and creation of AMMs

apps/cow-amm-deployer/src/app/[userId]/new/(components)/CreateAMMForm.tsx

@@ -1,13 +1,14 @@
 "use client";
 import { zodResolver } from "@hookform/resolvers/zod";
 import { useRouter } from "next/navigation";
-import { useEffect } from "react";
+import { useEffect, useState } from "react";
 import { useForm, useWatch } from "react-hook-form";
 import { Address } from "viem";
 import { useAccount } from "wagmi";
 import { z } from "zod";
 
 import { Button } from "#/components";
+import { AlertCard } from "#/components/AlertCard";
 import { Input } from "#/components/Input";
 import { PriceOracleForm } from "#/components/PriceOracleForm";
 import { TokenAmountInput } from "#/components/TokenAmountInput";
@@ -20,11 +21,13 @@ import {
 } from "#/components/ui/accordion";
 import { Form } from "#/components/ui/form";
 import { useManagedTransaction } from "#/hooks/tx-manager/useManagedTransaction";
+import { useDebounce } from "#/hooks/useDebounce";
 import { ConstantProductFactoryABI } from "#/lib/abis/ConstantProductFactory";
+import { UNBALANCED_USD_DIFF_THRESHOLD } from "#/lib/constants";
 import { COW_CONSTANT_PRODUCT_FACTORY } from "#/lib/contracts";
 import { IToken } from "#/lib/fetchAmmData";
 import { ammFormSchema } from "#/lib/schema";
-import { getNewMinTradeToken0 } from "#/lib/tokenUtils";
+import { fetchTokenUsdPrice, getNewMinTradeToken0 } from "#/lib/tokenUtils";
 import { buildTxCreateAMMArgs } from "#/lib/transactionFactory";
 import { cn } from "#/lib/utils";
 import { ChainId, publicClientsFromIds } from "#/utils/chainsPublicClients";
@@ -75,6 +78,13 @@ export function CreateAMMForm({ userId }: { userId: string }) {
       writeContract(buildTxCreateAMMArgs({ data }));
     }
   };
+  const [token0UsdPrice, setToken0UsdPrice] = useState<number>();
+  const [token1UsdPrice, setToken1UsdPrice] = useState<number>();
+  const [amountUsdDiff, setAmountUsdDiff] = useState<number>();
+  const debouncedAmountUsdDiff = useDebounce<number | undefined>(
+    amountUsdDiff,
+    300,
+  );
 
   useEffect(() => {
     setValue("safeAddress", safeAddress as string);
@@ -99,6 +109,38 @@ export function CreateAMMForm({ userId }: { userId: string }) {
       onTxStatusFinal();
     }
   }, [status]);
+  async function updateTokenUsdPrice(
+    token: IToken,
+    setAmountUsd: (value: number) => void,
+  ) {
+    const amountUsd = await fetchTokenUsdPrice({
+      chainId: chainId as ChainId,
+      tokenDecimals: token.decimals,
+      tokenAddress: token.address as Address,
+    });
+    setAmountUsd(amountUsd);
+  }
+
+  useEffect(() => {
+    if (token0) {
+      updateTokenUsdPrice(token0, setToken0UsdPrice);
+    }
+  }, [token0]);
+
+  useEffect(() => {
+    if (token1) {
+      updateTokenUsdPrice(token1, setToken1UsdPrice);
+    }
+  }, [token1]);
+
+  useEffect(() => {
+    if (token0?.address == token1?.address) return;
+    if (token0UsdPrice && token1UsdPrice && amount0 && amount1) {
+      const amount0Usd = amount0 * token0UsdPrice;
+      const amount1Usd = amount1 * token1UsdPrice;
+      setAmountUsdDiff(Math.abs(amount0Usd - amount1Usd));
+    }
+  }, [amount0, amount1, token0UsdPrice, token1UsdPrice]);
 
   return (
     // @ts-ignore
@@ -183,6 +225,18 @@ export function CreateAMMForm({ userId }: { userId: string }) {
         </AccordionItem>
       </Accordion>
 
+      <span>
+        {amountUsdDiff} {debouncedAmountUsdDiff}
+      </span>
+      {(debouncedAmountUsdDiff || 0) > UNBALANCED_USD_DIFF_THRESHOLD && (
+        <AlertCard title="Unbalanced amounts" style="warning">
+          <p>
+            The difference between the USD value of the two token amounts is
+            greater than $5000. This may lead to an unbalanced AMM and result in
+            loss of funds.
+          </p>
+        </AlertCard>
+      )}
       <div className="flex justify-center gap-x-5 mt-2">
         <Button
           loading={

apps/cow-amm-deployer/src/components/DepositForm.tsx

@@ -1,6 +1,6 @@
 "use client";
 
-import { toast } from "@bleu/ui";
+import { formatNumber, toast } from "@bleu/ui";
 import { zodResolver } from "@hookform/resolvers/zod";
 import { useForm, useWatch } from "react-hook-form";
 import { z } from "zod";
@@ -9,10 +9,17 @@ import { Button } from "#/components";
 import { TokenInfo } from "#/components/TokenInfo";
 import { Form, FormMessage } from "#/components/ui/form";
 import { useManagedTransaction } from "#/hooks/tx-manager/useManagedTransaction";
+import { useDebounce } from "#/hooks/useDebounce";
+import {
+  PRICE_IMPACT_THRESHOLD,
+  USD_VALUE_FOR_PRICE_IMPACT_WARNING,
+} from "#/lib/constants";
 import { ICowAmm } from "#/lib/fetchAmmData";
+import { calculatePriceImpact } from "#/lib/priceImpact";
 import { getDepositSchema } from "#/lib/schema";
 import { buildDepositAmmArgs } from "#/lib/transactionFactory";
 
+import { AlertCard } from "./AlertCard";
 import { TokenAmountInput } from "./TokenAmountInput";
 
 export function DepositForm({
@@ -26,7 +33,7 @@ export function DepositForm({
 }) {
   const schema = getDepositSchema(
     Number(walletBalanceToken0),
-    Number(walletBalanceToken1),
+    Number(walletBalanceToken1)
   );
 
   const form = useForm<z.input<typeof schema>>({
@@ -46,6 +53,18 @@ export function DepositForm({
     control,
     name: ["amount0", "amount1"],
   });
+  const depositUsdValue =
+    ammData.token0.usdPrice * amount0 + ammData.token1.usdPrice * amount1;
+
+  const priceImpact = calculatePriceImpact({
+    balance0: Number(ammData.token0.balance),
+    balance1: Number(ammData.token1.balance),
+    amount0: Number(amount0),
+    amount1: Number(amount1),
+  });
+
+  const debouncedPriceImpact = useDebounce<number>(priceImpact, 300);
+  const debouncedDepositUsdValue = useDebounce<number>(depositUsdValue, 300);
 
   const onSubmit = async (data: z.output<typeof schema>) => {
     const txArgs = buildDepositAmmArgs({
@@ -109,6 +128,16 @@ export function DepositForm({
           </FormMessage>
         )
       }
+      {debouncedDepositUsdValue > USD_VALUE_FOR_PRICE_IMPACT_WARNING &&
+        debouncedPriceImpact > PRICE_IMPACT_THRESHOLD && (
+          <AlertCard style="warning" title="High Price Impact">
+            <p>
+              The price impact of this deposit is{" "}
+              {formatNumber(debouncedPriceImpact * 100, 2)}%. Deposits with high
+              price impact may result in lost funds.
+            </p>
+          </AlertCard>
+        )}
 
       <Button
         loading={
@@ -120,7 +149,7 @@ export function DepositForm({
         className="w-full mt-2"
         disabled={!amount0 && !amount1}
       >
-        Deposit
+        Deposit ${formatNumber(debouncedDepositUsdValue, 2)}
       </Button>
     </Form>
   );

apps/cow-amm-deployer/src/hooks/useDebounce.ts

@@ -0,0 +1,17 @@
+import { useEffect, useState } from "react";
+
+export function useDebounce<T>(value: T, delay: number) {
+  const [debouncedValue, setDebouncedValue] = useState<T>(value);
+
+  useEffect(() => {
+    const handler = setTimeout(() => {
+      setDebouncedValue(value);
+    }, delay);
+
+    return () => {
+      clearTimeout(handler);
+    };
+  }, [value, delay]);
+
+  return debouncedValue;
+}

apps/cow-amm-deployer/src/lib/constants.ts

@@ -1,2 +1,8 @@
 export const BLEU_APP_DATA =
   "0x4d821ddc9d656177dad4d5c2f76a4bff2ed514ff69fa4aa4fd869d6e98d55c89";
+
+export const PRICE_IMPACT_THRESHOLD = 0.05;
+
+export const UNBALANCED_USD_DIFF_THRESHOLD = 5000;
+
+export const USD_VALUE_FOR_PRICE_IMPACT_WARNING = 5000;

apps/cow-amm-deployer/src/lib/priceImpact.ts

@@ -0,0 +1,24 @@
+export function calculatePriceImpact({
+  balance0,
+  balance1,
+  amount0,
+  amount1,
+}: {
+  balance0: number;
+  balance1: number;
+  amount0: number;
+  amount1: number;
+}) {
+  const token0Ratio = amount0 / balance0;
+  const token1Ratio = amount1 / balance1;
+  const ratio0BiggerThan1 = token0Ratio > token1Ratio;
+
+  const currentSpotPrice = ratio0BiggerThan1
+    ? balance1 / balance0
+    : balance0 / balance1;
+  const newSpotPrice = ratio0BiggerThan1
+    ? (balance1 + amount1) / (balance0 + amount0)
+    : (balance0 + amount0) / (balance1 + amount1);
+
+  return Math.abs(newSpotPrice - currentSpotPrice) / currentSpotPrice;
+}