Implement Taker Fee Burn Mechanism

app/modules.go

@@ -134,6 +134,7 @@ var moduleAccountPermissions = map[string][]string{
 	txfeestypes.NonNativeTxFeeCollectorName:  nil,
 	txfeestypes.TakerFeeStakersName:          nil,
 	txfeestypes.TakerFeeCommunityPoolName:    nil,
+	txfeestypes.TakerFeeBurnName:             nil,
 	txfeestypes.TakerFeeCollectorName:        nil,
 	wasmtypes.ModuleName:                     {authtypes.Burner},
 	tokenfactorytypes.ModuleName:             {authtypes.Minter, authtypes.Burner},

proto/osmosis/poolmanager/v1beta1/genesis.proto

@@ -123,13 +123,21 @@ message TakerFeeDistributionPercentage {
     (gogoproto.moretags) = "yaml:\"community_pool\"",
     (gogoproto.nullable) = false
   ];
+  string burn = 3 [
+
+    (gogoproto.customtype) = "cosmossdk.io/math.LegacyDec",
+    (gogoproto.moretags) = "yaml:\"burn\"",
+    (gogoproto.nullable) = false
+  ];
 }
 
 message TakerFeesTracker {
   repeated cosmos.base.v1beta1.Coin taker_fees_to_stakers = 1
       [ (gogoproto.nullable) = false ];
   repeated cosmos.base.v1beta1.Coin taker_fees_to_community_pool = 2
       [ (gogoproto.nullable) = false ];
+  repeated cosmos.base.v1beta1.Coin taker_fees_burned = 4
+      [ (gogoproto.nullable) = false ];
   int64 height_accounting_starts_from = 3
       [ (gogoproto.moretags) = "yaml:\"height_accounting_starts_from\"" ];
 }
@@ -144,4 +152,4 @@ message PoolVolume {
     (gogoproto.nullable) = false,
     (gogoproto.castrepeated) = "github.com/cosmos/cosmos-sdk/types.Coins"
   ];
-}
+}

x/poolmanager/protorev.go

@@ -43,6 +43,23 @@ func (k Keeper) UpdateTakerFeeTrackerForCommunityPoolByDenom(ctx sdk.Context, de
 	return osmoutils.IncreaseCoinByDenomFromPrefix(ctx, k.storeKey, types.KeyTakerFeeCommunityPoolProtoRevArray, denom, increasedAmt)
 }
 
+// GetTakerFeeTrackerForBurn returns the taker fee for burn tracker for all denoms that has been
+// collected since the accounting height.
+func (k Keeper) GetTakerFeeTrackerForBurn(ctx sdk.Context) []sdk.Coin {
+	return osmoutils.GetCoinArrayFromPrefix(ctx, k.storeKey, types.KeyTakerFeeBurnProtoRevArray)
+}
+
+// GetTakerFeeTrackerForBurnByDenom returns the taker fee for burn tracker for the specified denom that has been
+// collected since the accounting height. If the denom is not found, a zero coin is returned.
+func (k Keeper) GetTakerFeeTrackerForBurnByDenom(ctx sdk.Context, denom string) (sdk.Coin, error) {
+	return osmoutils.GetCoinByDenomFromPrefix(ctx, k.storeKey, types.KeyTakerFeeBurnProtoRevArray, denom)
+}
+
+// UpdateTakerFeeTrackerForBurnByDenom increases the take fee for burn tracker for the specified denom by the specified amount.
+func (k Keeper) UpdateTakerFeeTrackerForBurnByDenom(ctx sdk.Context, denom string, increasedAmt osmomath.Int) error {
+	return osmoutils.IncreaseCoinByDenomFromPrefix(ctx, k.storeKey, types.KeyTakerFeeBurnProtoRevArray, denom, increasedAmt)
+}
+
 // GetTakerFeeTrackerStartHeight gets the height from which we started accounting for taker fees.
 func (k Keeper) GetTakerFeeTrackerStartHeight(ctx sdk.Context) int64 {
 	startHeight := gogotypes.Int64Value{}

x/poolmanager/types/keys.go

@@ -49,6 +49,9 @@ var (
 	// KeyTakerFeeCommunityPoolProtoRevArray defines key to store the taker fee for community pool tracker coin array.
 	KeyTakerFeeCommunityPoolProtoRevArray = []byte{0x09}
 
+	// KeyTakerFeeBurnProtoRevArray defines key to store the taker fee for burn tracker coin array.
+	KeyTakerFeeBurnProtoRevArray = []byte{0x0B}
+
 	// TakerFeeSkimAccrualPrefix defines the prefix to store taker fee skim accrual data.
 	TakerFeeSkimAccrualPrefix = []byte{0x0A}
 

x/txfees/keeper/hooks.go

@@ -103,6 +103,31 @@ func (k Keeper) calculateDistributeAndTrackTakerFees(ctx sdk.Context, defaultFee
 	takerFeeParams := poolManagerParams.TakerFeeParams
 	osmoTakerFeeDistribution := takerFeeParams.OsmoTakerFeeDistribution
 
+	// Burn:
+	if osmoTakerFeeDistribution.Burn.GT(zeroDec) && osmoFromTakerFeeModuleAccount.Amount.GT(osmomath.ZeroInt()) {
+		// Calculate burn amount
+		osmoTakerFeeToBurnDec := osmoFromTakerFeeModuleAccount.Amount.ToLegacyDec().Mul(osmoTakerFeeDistribution.Burn)
+		osmoTakerFeeToBurnCoin := sdk.NewCoin(defaultFeesDenom, osmoTakerFeeToBurnDec.TruncateInt())
+
+		// Send to the burn address (null address)
+		burnAddress, _ := sdk.AccAddressFromBech32("osmo1qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqmcn030")
+
+		applyFuncIfNoErrorAndLog(ctx, func(cacheCtx sdk.Context) error {
+			err := k.bankKeeper.SendCoins(ctx, takerFeeModuleAccount, burnAddress, sdk.NewCoins(osmoTakerFeeToBurnCoin))
+			if err != nil {
+				return err
+			}
+			trackerErr := k.poolManager.UpdateTakerFeeTrackerForBurnByDenom(ctx, osmoTakerFeeToBurnCoin.Denom, osmoTakerFeeToBurnCoin.Amount)
+			if trackerErr != nil {
+				ctx.Logger().Error("Error updating taker fee tracker for burn by denom", "error", trackerErr)
+			}
+			return nil
+		}, txfeestypes.TakerFeeFailedBurnUpdateMetricName, osmoTakerFeeToBurnCoin)
+
+		// Update the remaining amount after burn
+		osmoFromTakerFeeModuleAccount = osmoFromTakerFeeModuleAccount.Sub(osmoTakerFeeToBurnCoin)
+	}
+
 	// Community Pool:
 	if osmoTakerFeeDistribution.CommunityPool.GT(zeroDec) && osmoFromTakerFeeModuleAccount.Amount.GT(osmomath.ZeroInt()) {
 		// Osmo community pool funds are a direct send to the community pool.
@@ -139,9 +164,41 @@ func (k Keeper) calculateDistributeAndTrackTakerFees(ctx sdk.Context, defaultFee
 	authorizedQuoteDenoms := poolManagerParams.AuthorizedQuoteDenoms
 
 	nonOsmoForCommunityPool := sdk.NewCoins()
+	nonOsmoForBurn := sdk.NewCoins()
 
 	// Loop through all remaining tokens in the taker fee module account.
 	for _, takerFeeCoin := range takerFeeModuleAccountCoins {
+		// Burn:
+		if nonOsmoTakerFeeDistribution.Burn.GT(zeroDec) && takerFeeCoin.Amount.GT(osmomath.ZeroInt()) {
+			denomIsWhitelisted := isDenomWhitelisted(takerFeeCoin.Denom, authorizedQuoteDenoms)
+			// If the non osmo denom is a whitelisted quote asset, we directly send to the burn address
+			if denomIsWhitelisted {
+				nonOsmoTakerFeeToBurnDec := takerFeeCoin.Amount.ToLegacyDec().Mul(nonOsmoTakerFeeDistribution.Burn)
+				nonOsmoTakerFeeToBurnCoin := sdk.NewCoin(takerFeeCoin.Denom, nonOsmoTakerFeeToBurnDec.TruncateInt())
+
+				// Send to the burn address (null address)
+				burnAddress, _ := sdk.AccAddressFromBech32("osmo1qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqmcn030")
+
+				applyFuncIfNoErrorAndLog(ctx, func(cacheCtx sdk.Context) error {
+					err := k.bankKeeper.SendCoins(ctx, takerFeeModuleAccount, burnAddress, sdk.NewCoins(nonOsmoTakerFeeToBurnCoin))
+					if err == nil {
+						takerFeeCoin.Amount = takerFeeCoin.Amount.Sub(nonOsmoTakerFeeToBurnCoin.Amount)
+					}
+					trackerErr := k.poolManager.UpdateTakerFeeTrackerForBurnByDenom(ctx, nonOsmoTakerFeeToBurnCoin.Denom, nonOsmoTakerFeeToBurnCoin.Amount)
+					if trackerErr != nil {
+						ctx.Logger().Error("Error updating taker fee tracker for burn by denom", "error", trackerErr)
+					}
+					return err
+				}, txfeestypes.TakerFeeFailedBurnUpdateMetricName, nonOsmoTakerFeeToBurnCoin)
+			} else {
+				// If the non osmo denom is not a whitelisted asset, we track the assets here and later swap everything to OSMO and then burn
+				nonOsmoTakerFeeToBurnDec := takerFeeCoin.Amount.ToLegacyDec().Mul(nonOsmoTakerFeeDistribution.Burn)
+				nonOsmoTakerFeeToBurnCoin := sdk.NewCoin(takerFeeCoin.Denom, nonOsmoTakerFeeToBurnDec.TruncateInt())
+				nonOsmoForBurn = nonOsmoForBurn.Add(nonOsmoTakerFeeToBurnCoin)
+				takerFeeCoin.Amount = takerFeeCoin.Amount.Sub(nonOsmoTakerFeeToBurnCoin.Amount)
+			}
+		}
+
 		// Community Pool:
 		if nonOsmoTakerFeeDistribution.CommunityPool.GT(zeroDec) && takerFeeCoin.Amount.GT(osmomath.ZeroInt()) {
 			denomIsWhitelisted := isDenomWhitelisted(takerFeeCoin.Denom, authorizedQuoteDenoms)
@@ -179,6 +236,13 @@ func (k Keeper) calculateDistributeAndTrackTakerFees(ctx sdk.Context, defaultFee
 		return err
 	}, txfeestypes.TakerFeeFailedCommunityPoolUpdateMetricName, nonOsmoForCommunityPool)
 
+	// Send the non-native, non-whitelisted taker fees slated for burn to the taker fee burn module account.
+	// We do this in the event that the swap fails, we can still track the amount of non-native, non-whitelisted taker fees that were intended for burning.
+	applyFuncIfNoErrorAndLog(ctx, func(cacheCtx sdk.Context) error {
+		err := k.bankKeeper.SendCoinsFromAccountToModule(ctx, takerFeeModuleAccount, txfeestypes.TakerFeeBurnName, nonOsmoForBurn)
+		return err
+	}, txfeestypes.TakerFeeFailedBurnUpdateMetricName, nonOsmoForBurn)
+
 	// Swap the non-native, non-whitelisted taker fees slated for community pool into the denom specified in the pool manager params.
 	takerFeeCommunityPoolModuleAccount := k.accountKeeper.GetModuleAddress(txfeestypes.TakerFeeCommunityPoolName)
 	denomToSwapTo := poolManagerParams.TakerFeeParams.CommunityPoolDenomToSwapNonWhitelistedAssetsTo
@@ -195,6 +259,22 @@ func (k Keeper) calculateDistributeAndTrackTakerFees(ctx sdk.Context, defaultFee
 		}, txfeestypes.TakerFeeFailedCommunityPoolUpdateMetricName, totalCoinOut)
 	}
 
+	// Swap the non-native, non-whitelisted taker fees slated for burn into OSMO.
+	takerFeeBurnModuleAccount := k.accountKeeper.GetModuleAddress(txfeestypes.TakerFeeBurnName)
+	totalCoinOut = k.swapNonNativeFeeToDenom(ctx, defaultFeesDenom, takerFeeBurnModuleAccount)
+	// Now that the non whitelisted assets have been swapped, send them to the burn address.
+	if totalCoinOut.Amount.GT(osmomath.ZeroInt()) {
+		burnAddress, _ := sdk.AccAddressFromBech32("osmo1qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqmcn030")
+		applyFuncIfNoErrorAndLog(ctx, func(cacheCtx sdk.Context) error {
+			err := k.bankKeeper.SendCoins(ctx, takerFeeBurnModuleAccount, burnAddress, sdk.NewCoins(totalCoinOut))
+			trackerErr := k.poolManager.UpdateTakerFeeTrackerForBurnByDenom(ctx, totalCoinOut.Denom, totalCoinOut.Amount)
+			if trackerErr != nil {
+				ctx.Logger().Error("Error updating taker fee tracker for burn by denom", "error", trackerErr)
+			}
+			return err
+		}, txfeestypes.TakerFeeFailedBurnUpdateMetricName, totalCoinOut)
+	}
+
 	// Send the non-native taker fees slated for stakers to the taker fee staking module account.
 	// We do this in the event that the swap fails, we can still track the amount of non-native taker fees that were intended for stakers.
 	var remainingTakerFeeModuleAccBal sdk.Coins

x/txfees/types/expected_keepers.go

@@ -54,6 +54,7 @@ type PoolManager interface {
 	) (price osmomath.BigDec, err error)
 	UpdateTakerFeeTrackerForCommunityPoolByDenom(ctx sdk.Context, denom string, increasedAmt osmomath.Int) error
 	UpdateTakerFeeTrackerForStakersByDenom(ctx sdk.Context, denom string, increasedAmt osmomath.Int) error
+	UpdateTakerFeeTrackerForBurnByDenom(ctx sdk.Context, denom string, increasedAmt osmomath.Int) error
 	GetAllTakerFeeShareAccumulators(ctx sdk.Context) ([]poolmanagertypes.TakerFeeSkimAccumulator, error)
 	GetTakerFeeShareAgreementFromDenomNoCache(ctx sdk.Context, takerFeeShareDenom string) (poolmanagertypes.TakerFeeShareAgreement, bool)
 	DeleteAllTakerFeeShareAccumulatorsForTakerFeeShareDenom(ctx sdk.Context, takerFeeShareDenom string)

x/txfees/types/keys.go

@@ -25,6 +25,11 @@ const (
 	// This is done so that, in the event of a failed swap, the funds slated for stakers are not grouped back with the rest of the taker fees in the next epoch.
 	TakerFeeStakersName = "non_native_fee_collector_stakers"
 
+	// TakerFeeBurnName is the name of the module account that collects non-native taker fees, swaps, and sends them to the burn address.
+	// Note, all taker fees initially get sent to the TakerFeeCollectorName, and then prior to the taker fees slated for burning being swapped and sent to burn address, they are sent to this account.
+	// This is done so that, in the event of a failed swap, the funds slated for burning are not grouped back with the rest of the taker fees in the next epoch.
+	TakerFeeBurnName = "non_native_fee_collector_burn"
+
 	// TakerFeeCollectorName is the module account name for the taker fee collector account address. It collects both native and non-native taker fees.
 	TakerFeeCollectorName = "taker_fee_collector"
 

x/txfees/types/telemetry.go

@@ -35,6 +35,13 @@ var (
 	// * match_denom - the match denom to swap to.
 	// * err - the error occurred
 	TakerFeeNoSkipRouteMetricName = formatTxFeesMetricName("takerfee_no_skip_route")
+	// txfees_takerfee_failed_burn_update
+	//
+	// counter that is increased if taker fee burn distribution fails
+	// Has the following labels:
+	// * coins - the coins that fail to be sent.
+	// * err - the error occurred
+	TakerFeeFailedBurnUpdateMetricName = formatTxFeesMetricName("takerfee_failed_burn_update")
 )
 
 // formatTxFeesMetricName formats the tx fees module metric name.