From 07b8930b948f4fda3e7c2abe59611cc368b5d4b3 Mon Sep 17 00:00:00 2001
From: dglowinski <dariushg32111@gmail.com>
Date: Fri, 5 Jul 2024 17:51:28 +0200
Subject: [PATCH] fix div zero in liquidation when liability value is zero

---
 src/EVault/modules/Liquidation.sol            |  4 +-
 .../evault/modules/Liquidation/full.t.sol     | 51 +++++++++++++++++++
 2 files changed, 54 insertions(+), 1 deletion(-)

diff --git a/src/EVault/modules/Liquidation.sol b/src/EVault/modules/Liquidation.sol
index 07d4ca0e..fd33bc2e 100644
--- a/src/EVault/modules/Liquidation.sol
+++ b/src/EVault/modules/Liquidation.sol
@@ -122,7 +122,9 @@ abstract contract LiquidationModule is ILiquidation, BalanceUtils, LiquidityUtil
             calculateLiquidity(vaultCache, liqCache.violator, liqCache.collaterals, true);
 
         // no violation
-        if (collateralAdjustedValue > liabilityValue) return liqCache;
+        if (collateralAdjustedValue > liabilityValue || liabilityValue == 0) {
+            return liqCache;
+        }
 
         // Compute discount
 
diff --git a/test/unit/evault/modules/Liquidation/full.t.sol b/test/unit/evault/modules/Liquidation/full.t.sol
index 3ec6e028..9fd9fff5 100644
--- a/test/unit/evault/modules/Liquidation/full.t.sol
+++ b/test/unit/evault/modules/Liquidation/full.t.sol
@@ -820,6 +820,57 @@ contract VaultLiquidation_Test is EVaultTestBase {
         assertEq(eTST.totalBorrows(), 0);
     }
 
+    function test_zeroLiabilityWorth() public {
+        // set up liquidator to support the debt
+        startHoax(lender);
+        evc.enableController(lender, address(eTST));
+        evc.enableCollateral(lender, address(eTST3));
+        evc.enableCollateral(lender, address(eTST2));
+
+        startHoax(borrower);
+        evc.enableCollateral(borrower, address(eTST3));
+        evc.enableController(borrower, address(eTST));
+        eTST.borrow(5e18, borrower);
+
+        startHoax(address(this));
+        eTST.setLTV(address(eTST3), 0.95e4, 0.95e4, 0);
+
+        // liability is worthless now (could be a result of rounding down in real scenario)
+        oracle.setPrice(address(assetTST), unitOfAccount, 0);
+
+        (uint256 collateralValue, uint256 liabilityValue) = eTST.accountLiquidity(borrower, false);
+        assertEq(liabilityValue, 0);
+        assertGt(collateralValue, 0);
+
+        (uint256 maxRepay, uint256 maxYield) = eTST.checkLiquidation(lender, borrower, address(eTST2));
+        assertEq(maxRepay, 0);
+        assertEq(maxYield, 0);
+
+        // now collateral is worthless
+        oracle.setPrice(address(assetTST2), unitOfAccount, 0);
+
+        (collateralValue, liabilityValue) = eTST.accountLiquidity(borrower, false);
+        // both values zero now
+        assertEq(liabilityValue, 0);
+        assertEq(collateralValue, 0);
+
+        (maxRepay, maxYield) = eTST.checkLiquidation(lender, borrower, address(eTST2));
+        assertEq(maxRepay, 0);
+        assertEq(maxYield, 0);
+
+        uint256 debtBefore = eTST.debtOf(borrower);
+        uint256 balanceBefore = eTST2.balanceOf(borrower);
+
+        // liquidation is a no-op
+        startHoax(lender);
+        vm.expectEmit();
+        emit Events.Liquidate(lender, borrower, address(eTST2), 0, 0);
+        eTST.liquidate(borrower, address(eTST2), type(uint256).max, 0);
+
+        assertEq(eTST.debtOf(borrower), debtBefore);
+        assertEq(eTST2.balanceOf(borrower), balanceBefore);
+    }
+
     function test_zeroLTVCollateral() public {
         // set up liquidator to support the debt
         startHoax(lender);