refactor: allow zero qualifying balancer shares in CL incentives (#6162)

* refactor: allow zero qualifying balancer shares * update changelog --------- Co-authored-by: devbot-wizard <[email protected]>
osmosis-labs · Aug 25, 2023 · ba8652b · ba8652b
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diff --git a/CHANGELOG.md b/CHANGELOG.md
@@ -46,6 +46,10 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 * [#6161](https://github.com/osmosis-labs/osmosis/pull/6161) Reduce CPU time of epochs
 
+### Bug Fixes
+
+* [#6162](https://github.com/osmosis-labs/osmosis/pull/6162) allow zero qualifying balancer shares in CL incentives
+
 ### API breaks
 
 * [#6071](https://github.com/osmosis-labs/osmosis/pull/6071) reduce number of returns for UpdatePosition and TicksToSqrtPrice functions

diff --git a/x/concentrated-liquidity/incentives.go b/x/concentrated-liquidity/incentives.go
@@ -172,32 +172,24 @@ func (k Keeper) prepareBalancerPoolAsFullRange(ctx sdk.Context, clPoolId uint64,
 	// relaxed in the future.
 	// Note that we check denom compatibility later, and pool weights technically do not matter as they
 	// are analogous to changing the spot price, which is handled by our lower bounding.
-	if len(balancerPoolLiquidity) != 2 {
+	// Note that due to low share ratio, the balancer token liquidity may be truncated to zero.
+	// Balancer liquidity may also upgrade in-full to CL.
+	if len(balancerPoolLiquidity) > 2 {
 		return 0, sdk.ZeroDec(), types.ErrInvalidBalancerPoolLiquidityError{ClPoolId: clPoolId, BalancerPoolId: canonicalBalancerPoolId, BalancerPoolLiquidity: balancerPoolLiquidity}
 	}
 
-	// We ensure that the asset ordering is correct when passing Balancer assets into the CL pool.
-	var asset0Amount, asset1Amount sdk.Int
-	if balancerPoolLiquidity[0].Denom == clPool.GetToken0() {
-		asset0Amount = balancerPoolLiquidity[0].Amount
-		asset1Amount = balancerPoolLiquidity[1].Amount
+	denom0 := clPool.GetToken0()
+	denom1 := clPool.GetToken1()
 
-		// Ensure second denom matches (bal1 -> CL1)
-		if balancerPoolLiquidity[1].Denom != clPool.GetToken1() {
-			return 0, sdk.ZeroDec(), types.ErrInvalidBalancerPoolLiquidityError{ClPoolId: clPoolId, BalancerPoolId: canonicalBalancerPoolId, BalancerPoolLiquidity: balancerPoolLiquidity}
-		}
-	} else if balancerPoolLiquidity[0].Denom == clPool.GetToken1() {
-		asset0Amount = balancerPoolLiquidity[1].Amount
-		asset1Amount = balancerPoolLiquidity[0].Amount
-
-		// Ensure second denom matches (bal1 -> CL0)
-		if balancerPoolLiquidity[1].Denom != clPool.GetToken0() {
-			return 0, sdk.ZeroDec(), types.ErrInvalidBalancerPoolLiquidityError{ClPoolId: clPoolId, BalancerPoolId: canonicalBalancerPoolId, BalancerPoolLiquidity: balancerPoolLiquidity}
-		}
-	} else {
+	// This check's purpose is to confirm that denoms are the same.
+	clCoins := totalBalancerPoolLiquidity.FilterDenoms([]string{denom0, denom1})
+	if len(clCoins) != 2 {
 		return 0, sdk.ZeroDec(), types.ErrInvalidBalancerPoolLiquidityError{ClPoolId: clPoolId, BalancerPoolId: canonicalBalancerPoolId, BalancerPoolLiquidity: balancerPoolLiquidity}
 	}
 
+	asset0Amount := balancerPoolLiquidity.AmountOf(denom0)
+	asset1Amount := balancerPoolLiquidity.AmountOf(denom1)
+
 	// Calculate the amount of liquidity the Balancer amounts qualify in the CL pool. Note that since we use the CL spot price, this is
 	// safe against prices drifting apart between the two pools (we take the lower bound on the qualifying liquidity in this case).
 	// The `sqrtPriceLowerTick` and `sqrtPriceUpperTick` fields are set to the appropriate values for a full range position.
@@ -438,7 +430,9 @@ func (k Keeper) updateGivenPoolUptimeAccumulatorsToNow(ctx sdk.Context, pool typ
 	// Even though this exposes CL LPs to getting immediately diluted by a large Balancer position, this would
 	// require a lot of capital to be tied up in a two week bond, which is a viable tradeoff given the relative
 	// simplicity of this approach.
-	if balancerPoolId != 0 {
+	// It is possible that the balancer qualifying shares are zero if the bonded liquidity in the
+	// pool is extremely low. As a result, in that case we simply skip claiming.
+	if balancerPoolId != 0 && !qualifyingBalancerShares.IsZero() {
 		_, err := k.claimAndResetFullRangeBalancerPool(ctx, poolId, balancerPoolId, uptimeAccums)
 		if err != nil {
 			return err