Hard: introduce LTV index (#742)

* hotfix * update params, keys * liquidation by keeper * refactor GetPendingBorrowBalance * fix app build * elegant handling of denom arrays * auction deposit in lots * add error msg * update tests with new params * happy path liquidation test * update liquidator macc name * refactor reward % to money market params * refactor tests for updated params * compile: harvest liquidator module account * add liquidate msg * liquidation approach * update liquidations * return remaining deposit coins to original borrowr * check keeper reward before sending * introduce ValuationMap * convert Ints <> Decs * implement double-loop * ModuleAccountName * sort keys for deterministic auctions * test: correct auctions created * test: preset keeper coins * ensure deterministic iteration * test cases * update repay test * auction fixes, tests * LTV index * user actions sync interest and update ltv index * tests: all deposits must have money markets * reorder borrow logic * check mm before setting borrow index * insert into LTV index even when LTV is 0
2024-12-26 00:05:18 +00:00 · 2020-12-16 22:08:29 +01:00 · 2020-12-16 22:08:29 +01:00 · 6c0890d5ff
commit 6c0890d5ff
parent 89f07e92b4
11 changed files with 315 additions and 51 deletions
--- a/x/harvest/keeper/borrow.go
+++ b/x/harvest/keeper/borrow.go
@ -15,15 +15,27 @@ func (k Keeper) Borrow(ctx sdk.Context, borrower sdk.AccAddress, coins sdk.Coins
 	for _, coin := range coins {
 		_, foundBorrowIndex := k.GetBorrowIndex(ctx, coin.Denom)
 		if !foundBorrowIndex {
-			k.SetBorrowIndex(ctx, coin.Denom, sdk.OneDec())
+			_, foundMM := k.GetMoneyMarket(ctx, coin.Denom)
+			if foundMM {
+				k.SetBorrowIndex(ctx, coin.Denom, sdk.OneDec())
+			}
 		}
 	}

-	// Sync user's borrow balance (only for coins user is requesting to borrow)
-	k.SyncBorrowInterest(ctx, borrower, coins)
+	// Get current stored LTV based on stored borrows/deposits
+	prevLtv, shouldRemoveIndex, err := k.GetCurrentLTV(ctx, borrower)
+	if err != nil {
+		return err
+	}
+
+	// If the user has an existing borrow, sync its outstanding interest
+	_, found := k.GetBorrow(ctx, borrower)
+	if found {
+		k.SyncOustandingInterest(ctx, borrower)
+	}

 	// Validate borrow amount within user and protocol limits
-	err := k.ValidateBorrow(ctx, borrower, coins)
+	err = k.ValidateBorrow(ctx, borrower, coins)
 	if err != nil {
 		return err
 	}
@ -45,14 +57,26 @@ func (k Keeper) Borrow(ctx sdk.Context, borrower sdk.AccAddress, coins sdk.Coins
 		}
 	}

-	borrow, found := k.GetBorrow(ctx, borrower)
+	// On user's first borrow, build borrow index list containing denoms and current global borrow index value
+	// We use a list of BorrowIndexItem here because Amino doesn't support marshaling maps.
 	if !found {
-		return types.ErrBorrowNotFound // This should never happen
+		var borrowIndexes types.BorrowIndexes
+		for _, coin := range coins {
+			borrowIndexValue, _ := k.GetBorrowIndex(ctx, coin.Denom)
+			borrowIndex := types.NewBorrowIndexItem(coin.Denom, borrowIndexValue)
+			borrowIndexes = append(borrowIndexes, borrowIndex)
+		}
+		borrow := types.NewBorrow(borrower, sdk.Coins{}, borrowIndexes)
+		k.SetBorrow(ctx, borrow)
 	}
+
 	// Add the newly borrowed coins to the user's borrow object
+	borrow, _ := k.GetBorrow(ctx, borrower)
 	borrow.Amount = borrow.Amount.Add(coins...)
 	k.SetBorrow(ctx, borrow)

+	k.UpdateItemInLtvIndex(ctx, prevLtv, shouldRemoveIndex, borrower)
+
 	// Update total borrowed amount by newly borrowed coins. Don't add user's pending interest as
 	// it has already been included in the total borrowed coins by the BeginBlocker.
 	k.IncrementBorrowedCoins(ctx, coins)
@ -68,55 +92,44 @@ func (k Keeper) Borrow(ctx sdk.Context, borrower sdk.AccAddress, coins sdk.Coins
 	return nil
 }

-// SyncBorrowInterest updates the user's owed interest on newly borrowed coins to the latest global state,
-// returning an sdk.Coins object containing the amount of newly accumulated interest.
-func (k Keeper) SyncBorrowInterest(ctx sdk.Context, borrower sdk.AccAddress, coins sdk.Coins) sdk.Coins {
+// SyncOustandingInterest updates the user's owed interest on newly borrowed coins to the latest global state
+func (k Keeper) SyncOustandingInterest(ctx sdk.Context, addr sdk.AccAddress) {
 	totalNewInterest := sdk.Coins{}

 	// Update user's borrow index list for each asset in the 'coins' array.
 	// We use a list of BorrowIndexItem here because Amino doesn't support marshaling maps.
-	borrow, found := k.GetBorrow(ctx, borrower)
-	if !found { // User's first borrow
-		// Build borrow index list containing (denoms, borrow index value at borrow time)
-		var borrowIndexes types.BorrowIndexes
-		for _, coin := range coins {
-			borrowIndexValue, _ := k.GetBorrowIndex(ctx, coin.Denom)
-			borrowIndex := types.NewBorrowIndexItem(coin.Denom, borrowIndexValue)
-			borrowIndexes = append(borrowIndexes, borrowIndex)
-		}
-		borrow = types.NewBorrow(borrower, sdk.Coins{}, borrowIndexes)
-	} else { // User has existing borrow
-		for _, coin := range coins {
-			// Locate the borrow index item by coin denom in the user's list of borrow indexes
-			foundAtIndex := -1
-			for i := range borrow.Index {
-				if borrow.Index[i].Denom == coin.Denom {
-					foundAtIndex = i
-					break
-				}
-			}
-
-			borrowIndexValue, _ := k.GetBorrowIndex(ctx, coin.Denom)
-			if foundAtIndex == -1 { // First time user has borrowed this denom
-				borrow.Index = append(borrow.Index, types.NewBorrowIndexItem(coin.Denom, borrowIndexValue))
-			} else { // User has an existing borrow index for this denom
-				// Calculate interest owed by user since asset's last borrow index update
-				storedAmount := sdk.NewDecFromInt(borrow.Amount.AmountOf(coin.Denom))
-				userLastBorrowIndex := borrow.Index[foundAtIndex].Value
-				interest := (storedAmount.Quo(userLastBorrowIndex).Mul(borrowIndexValue)).Sub(storedAmount)
-				totalNewInterest = totalNewInterest.Add(sdk.NewCoin(coin.Denom, interest.TruncateInt()))
-				// We're synced up, so update user's borrow index value to match the current global borrow index value
-				borrow.Index[foundAtIndex].Value = borrowIndexValue
-			}
-		}
-		// Add all pending interest to user's borrow
-		borrow.Amount = borrow.Amount.Add(totalNewInterest...)
+	borrow, found := k.GetBorrow(ctx, addr)
+	if !found {
+		return
 	}
+	for _, coin := range borrow.Amount {
+		// Locate the borrow index item by coin denom in the user's list of borrow indexes
+		foundAtIndex := -1
+		for i := range borrow.Index {
+			if borrow.Index[i].Denom == coin.Denom {
+				foundAtIndex = i
+				break
+			}
+		}
+
+		borrowIndexValue, _ := k.GetBorrowIndex(ctx, coin.Denom)
+		if foundAtIndex == -1 { // First time user has borrowed this denom
+			borrow.Index = append(borrow.Index, types.NewBorrowIndexItem(coin.Denom, borrowIndexValue))
+		} else { // User has an existing borrow index for this denom
+			// Calculate interest owed by user since asset's last borrow index update
+			storedAmount := sdk.NewDecFromInt(borrow.Amount.AmountOf(coin.Denom))
+			userLastBorrowIndex := borrow.Index[foundAtIndex].Value
+			interest := (storedAmount.Quo(userLastBorrowIndex).Mul(borrowIndexValue)).Sub(storedAmount)
+			totalNewInterest = totalNewInterest.Add(sdk.NewCoin(coin.Denom, interest.TruncateInt()))
+			// We're synced up, so update user's borrow index value to match the current global borrow index value
+			borrow.Index[foundAtIndex].Value = borrowIndexValue
+		}
+	}
+	// Add all pending interest to user's borrow
+	borrow.Amount = borrow.Amount.Add(totalNewInterest...)

 	// Update user's borrow in the store
 	k.SetBorrow(ctx, borrow)
-
-	return totalNewInterest
 }

 // ValidateBorrow validates a borrow request against borrower and protocol requirements
--- a/x/harvest/keeper/borrow_test.go
+++ b/x/harvest/keeper/borrow_test.go
@ -10,6 +10,7 @@ import (
 	tmtime "github.com/tendermint/tendermint/types/time"

 	"github.com/kava-labs/kava/app"
+	"github.com/kava-labs/kava/x/harvest"
 	"github.com/kava-labs/kava/x/harvest/types"
 	"github.com/kava-labs/kava/x/pricefeed"
 )
@ -348,6 +349,9 @@ func (suite *KeeperTestSuite) TestBorrow() {

 			var err error

+			// Run BeginBlocker once to transition MoneyMarkets
+			harvest.BeginBlocker(suite.ctx, suite.keeper)
+
 			// Deposit coins to harvest
 			depositedCoins := sdk.NewCoins()
 			for _, depositCoin := range tc.args.depositCoins {
--- a/x/harvest/keeper/deposit.go
+++ b/x/harvest/keeper/deposit.go
@ -10,7 +10,15 @@ import (

 // Deposit deposit
 func (k Keeper) Deposit(ctx sdk.Context, depositor sdk.AccAddress, amount sdk.Coin) error {
-	err := k.ValidateDeposit(ctx, amount)
+	// Get current stored LTV based on stored borrows/deposits
+	prevLtv, shouldRemoveIndex, err := k.GetCurrentLTV(ctx, depositor)
+	if err != nil {
+		return err
+	}
+
+	k.SyncOustandingInterest(ctx, depositor)
+
+	err = k.ValidateDeposit(ctx, amount)
 	if err != nil {
 		return err
 	}
@ -29,6 +37,8 @@ func (k Keeper) Deposit(ctx sdk.Context, depositor sdk.AccAddress, amount sdk.Co

 	k.SetDeposit(ctx, deposit)

+	k.UpdateItemInLtvIndex(ctx, prevLtv, shouldRemoveIndex, depositor)
+
 	ctx.EventManager().EmitEvent(
 		sdk.NewEvent(
 			types.EventTypeHarvestDeposit,
--- a/x/harvest/keeper/deposit_test.go
+++ b/x/harvest/keeper/deposit_test.go
@ -10,7 +10,9 @@ import (
 	tmtime "github.com/tendermint/tendermint/types/time"

 	"github.com/kava-labs/kava/app"
+	"github.com/kava-labs/kava/x/harvest"
 	"github.com/kava-labs/kava/x/harvest/types"
+	"github.com/kava-labs/kava/x/pricefeed"
 )

 func (suite *KeeperTestSuite) TestDeposit() {
@ -110,14 +112,61 @@ func (suite *KeeperTestSuite) TestDeposit() {
 				types.MoneyMarkets{
 					types.NewMoneyMarket("usdx", types.NewBorrowLimit(false, sdk.NewDec(1000000000000000), loanToValue), "usdx:usd", sdk.NewInt(1000000), sdk.NewInt(USDX_CF*1000), types.NewInterestRateModel(sdk.MustNewDecFromStr("0.05"), sdk.MustNewDecFromStr("2"), sdk.MustNewDecFromStr("0.8"), sdk.MustNewDecFromStr("10")), sdk.MustNewDecFromStr("0.05"), sdk.ZeroDec()),
 					types.NewMoneyMarket("ukava", types.NewBorrowLimit(false, sdk.NewDec(1000000000000000), loanToValue), "kava:usd", sdk.NewInt(1000000), sdk.NewInt(KAVA_CF*1000), types.NewInterestRateModel(sdk.MustNewDecFromStr("0.05"), sdk.MustNewDecFromStr("2"), sdk.MustNewDecFromStr("0.8"), sdk.MustNewDecFromStr("10")), sdk.MustNewDecFromStr("0.05"), sdk.ZeroDec()),
+					types.NewMoneyMarket("bnb", types.NewBorrowLimit(false, sdk.NewDec(1000000000000000), loanToValue), "bnb:usd", sdk.NewInt(1000000), sdk.NewInt(BNB_CF*1000), types.NewInterestRateModel(sdk.MustNewDecFromStr("0.05"), sdk.MustNewDecFromStr("2"), sdk.MustNewDecFromStr("0.8"), sdk.MustNewDecFromStr("10")), sdk.MustNewDecFromStr("0.05"), sdk.ZeroDec()),
+					types.NewMoneyMarket("btcb", types.NewBorrowLimit(false, sdk.NewDec(1000000000000000), loanToValue), "btcb:usd", sdk.NewInt(1000000), sdk.NewInt(BTCB_CF*1000), types.NewInterestRateModel(sdk.MustNewDecFromStr("0.05"), sdk.MustNewDecFromStr("2"), sdk.MustNewDecFromStr("0.8"), sdk.MustNewDecFromStr("10")), sdk.MustNewDecFromStr("0.05"), sdk.ZeroDec()),
 				},
 			), types.DefaultPreviousBlockTime, types.DefaultDistributionTimes)
-			tApp.InitializeFromGenesisStates(authGS, app.GenesisState{types.ModuleName: types.ModuleCdc.MustMarshalJSON(harvestGS)})
+
+			// Pricefeed module genesis state
+			pricefeedGS := pricefeed.GenesisState{
+				Params: pricefeed.Params{
+					Markets: []pricefeed.Market{
+						{MarketID: "usdx:usd", BaseAsset: "usdx", QuoteAsset: "usd", Oracles: []sdk.AccAddress{}, Active: true},
+						{MarketID: "kava:usd", BaseAsset: "kava", QuoteAsset: "usd", Oracles: []sdk.AccAddress{}, Active: true},
+						{MarketID: "btcb:usd", BaseAsset: "btcb", QuoteAsset: "usd", Oracles: []sdk.AccAddress{}, Active: true},
+						{MarketID: "bnb:usd", BaseAsset: "bnb", QuoteAsset: "usd", Oracles: []sdk.AccAddress{}, Active: true},
+					},
+				},
+				PostedPrices: []pricefeed.PostedPrice{
+					{
+						MarketID:      "usdx:usd",
+						OracleAddress: sdk.AccAddress{},
+						Price:         sdk.MustNewDecFromStr("1.00"),
+						Expiry:        time.Now().Add(1 * time.Hour),
+					},
+					{
+						MarketID:      "kava:usd",
+						OracleAddress: sdk.AccAddress{},
+						Price:         sdk.MustNewDecFromStr("2.00"),
+						Expiry:        time.Now().Add(1 * time.Hour),
+					},
+					{
+						MarketID:      "btcb:usd",
+						OracleAddress: sdk.AccAddress{},
+						Price:         sdk.MustNewDecFromStr("100.00"),
+						Expiry:        time.Now().Add(1 * time.Hour),
+					},
+					{
+						MarketID:      "bnb:usd",
+						OracleAddress: sdk.AccAddress{},
+						Price:         sdk.MustNewDecFromStr("10.00"),
+						Expiry:        time.Now().Add(1 * time.Hour),
+					},
+				},
+			}
+
+			tApp.InitializeFromGenesisStates(authGS,
+				app.GenesisState{pricefeed.ModuleName: pricefeed.ModuleCdc.MustMarshalJSON(pricefeedGS)},
+				app.GenesisState{types.ModuleName: types.ModuleCdc.MustMarshalJSON(harvestGS)},
+			)
 			keeper := tApp.GetHarvestKeeper()
 			suite.app = tApp
 			suite.ctx = ctx
 			suite.keeper = keeper

+			// Run BeginBlocker once to transition MoneyMarkets
+			harvest.BeginBlocker(suite.ctx, suite.keeper)
+
 			// run the test
 			var err error
 			for i := 0; i < tc.args.numberDeposits; i++ {
--- a/x/harvest/keeper/keeper.go
+++ b/x/harvest/keeper/keeper.go
@ -358,3 +358,46 @@ func (k Keeper) SetBorrowIndex(ctx sdk.Context, denom string, borrowIndex sdk.De
 	bz := k.cdc.MustMarshalBinaryBare(borrowIndex)
 	store.Set([]byte(denom), bz)
 }
+
+// InsertIntoLtvIndex indexes a user's borrow object by its current LTV
+func (k Keeper) InsertIntoLtvIndex(ctx sdk.Context, ltv sdk.Dec, borrower sdk.AccAddress) {
+	store := prefix.NewStore(ctx.KVStore(k.key), types.LtvIndexPrefix)
+	store.Set(types.GetBorrowByLtvKey(ltv, borrower), borrower)
+}
+
+// RemoveFromLtvIndex removes a user's borrow object from the LTV index
+func (k Keeper) RemoveFromLtvIndex(ctx sdk.Context, ltv sdk.Dec, borrower sdk.AccAddress) {
+	store := prefix.NewStore(ctx.KVStore(k.key), types.LtvIndexPrefix)
+	store.Delete(types.GetBorrowByLtvKey(ltv, borrower))
+}
+
+// IterateLtvIndex provides an iterator over the borrowers ordered by LTV.
+// For results found before the cutoff count, the cb will be called and the item returned.
+func (k Keeper) IterateLtvIndex(ctx sdk.Context, cutoffCount int,
+	cb func(addr sdk.AccAddress) (stop bool)) {
+	store := prefix.NewStore(ctx.KVStore(k.key), types.LtvIndexPrefix)
+	iterator := store.Iterator(nil, nil)
+	count := 0
+
+	defer iterator.Close()
+	for ; iterator.Valid(); iterator.Next() {
+
+		// Stop iteration after first 10 items
+		count = count + 1
+		if count > cutoffCount {
+			break
+		}
+
+		id := iterator.Value()
+		cb(id)
+	}
+}
+
+// GetLtvIndexSlice returns the first 10 items in the LTV index from the store
+func (k Keeper) GetLtvIndexSlice(ctx sdk.Context) (addrs []sdk.AccAddress) {
+	k.IterateLtvIndex(ctx, 10, func(addr sdk.AccAddress) bool {
+		addrs = append(addrs, addr)
+		return false
+	})
+	return
+}
--- a/x/harvest/keeper/keeper_test.go
+++ b/x/harvest/keeper/keeper_test.go
@ -208,6 +208,54 @@ func (suite *KeeperTestSuite) TestIterateInterestRateModels() {
 	suite.Require().Equal(setDenoms, seenDenoms)
 }

+func (suite *KeeperTestSuite) TestSetDeleteLtvIndex() {
+	// LTV index should have 0 items
+	firstAddrs := suite.keeper.GetLtvIndexSlice(suite.ctx)
+	suite.Require().Equal(0, len(firstAddrs))
+
+	// Add an item to the LTV index
+	addr := sdk.AccAddress("test")
+	ltv := sdk.MustNewDecFromStr("1.1")
+	suite.Require().NotPanics(func() { suite.keeper.InsertIntoLtvIndex(suite.ctx, ltv, addr) })
+
+	// LTV index should have 1 item
+	secondAddrs := suite.keeper.GetLtvIndexSlice(suite.ctx)
+	suite.Require().Equal(1, len(secondAddrs))
+
+	// Attempt to remove invalid item from LTV index
+	fakeLtv := sdk.MustNewDecFromStr("1.2")
+	suite.Require().NotPanics(func() { suite.keeper.RemoveFromLtvIndex(suite.ctx, fakeLtv, addr) })
+
+	// LTV index should still have 1 item
+	thirdAddrs := suite.keeper.GetLtvIndexSlice(suite.ctx)
+	suite.Require().Equal(1, len(thirdAddrs))
+
+	// Attempt to remove valid item from LTV index
+	suite.Require().NotPanics(func() { suite.keeper.RemoveFromLtvIndex(suite.ctx, ltv, addr) })
+
+	// LTV index should still have 0 items
+	fourthAddrs := suite.keeper.GetLtvIndexSlice(suite.ctx)
+	suite.Require().Equal(0, len(fourthAddrs))
+}
+
+func (suite *KeeperTestSuite) TestIterateLtvIndex() {
+	var setAddrs []sdk.AccAddress
+	for i := 1; i <= 20; i++ {
+		addr := sdk.AccAddress("test" + fmt.Sprint(i))
+		incrementalDec := sdk.NewDec(int64(i)).Quo(sdk.NewDec(10))
+		ltv := sdk.OneDec().Add(incrementalDec)
+
+		// Set the ltv-address pair in the store
+		suite.Require().NotPanics(func() { suite.keeper.InsertIntoLtvIndex(suite.ctx, ltv, addr) })
+
+		setAddrs = append(setAddrs, addr)
+	}
+
+	// Only the first 10 addresses should be returned
+	sliceAddrs := suite.keeper.GetLtvIndexSlice(suite.ctx)
+	suite.Require().Equal(setAddrs[:10], sliceAddrs)
+}
+
 func (suite *KeeperTestSuite) getAccount(addr sdk.AccAddress) authexported.Account {
 	ak := suite.app.GetAccountKeeper()
 	return ak.GetAccount(suite.ctx, addr)
--- a/x/harvest/keeper/liquidation.go
+++ b/x/harvest/keeper/liquidation.go
@ -253,6 +253,83 @@ func (k Keeper) StartAuctions(ctx sdk.Context, borrower sdk.AccAddress, borrows,
 	return nil
 }

+// GetCurrentLTV calculates the user's current LTV based on their deposits/borrows in the store
+func (k Keeper) GetCurrentLTV(ctx sdk.Context, addr sdk.AccAddress) (sdk.Dec, bool, error) {
+	// Fetch deposits and parse coin denoms
+	deposits := k.GetDepositsByUser(ctx, addr)
+	depositDenoms := []string{}
+	for _, deposit := range deposits {
+		depositDenoms = append(depositDenoms, deposit.Amount.Denom)
+	}
+
+	// Fetch borrow balances and parse coin denoms
+	borrowBalances := k.GetBorrowBalance(ctx, addr)
+	if borrowBalances.IsZero() {
+		return sdk.ZeroDec(), false, nil
+	}
+	borrowDenoms := getDenoms(borrowBalances)
+
+	liqMap := make(map[string]LiqData)
+
+	// Load required liquidation data for every deposit/borrow denom
+	denoms := removeDuplicates(borrowDenoms, depositDenoms)
+	for _, denom := range denoms {
+		mm, found := k.GetMoneyMarket(ctx, denom)
+		if !found {
+			return sdk.ZeroDec(), false, sdkerrors.Wrapf(types.ErrMarketNotFound, "no market found for denom %s", denom)
+		}
+
+		priceData, err := k.pricefeedKeeper.GetCurrentPrice(ctx, mm.SpotMarketID)
+		if err != nil {
+			return sdk.ZeroDec(), false, err
+		}
+
+		liqMap[denom] = LiqData{priceData.Price, mm.BorrowLimit.LoanToValue, mm.ConversionFactor}
+	}
+
+	// Build valuation map to hold deposit coin USD valuations
+	depositCoinValues := types.NewValuationMap()
+	for _, deposit := range deposits {
+		dData := liqMap[deposit.Amount.Denom]
+		dCoinUsdValue := sdk.NewDecFromInt(deposit.Amount.Amount).Quo(sdk.NewDecFromInt(dData.conversionFactor)).Mul(dData.price)
+		depositCoinValues.Increment(deposit.Amount.Denom, dCoinUsdValue)
+	}
+
+	// Build valuation map to hold borrow coin USD valuations
+	borrowCoinValues := types.NewValuationMap()
+	for _, bCoin := range borrowBalances {
+		bData := liqMap[bCoin.Denom]
+		bCoinUsdValue := sdk.NewDecFromInt(bCoin.Amount).Quo(sdk.NewDecFromInt(bData.conversionFactor)).Mul(bData.price)
+		borrowCoinValues.Increment(bCoin.Denom, bCoinUsdValue)
+	}
+
+	// User doesn't have any deposits, catch divide by 0 error
+	sumDeposits := depositCoinValues.Sum()
+	if sumDeposits.Equal(sdk.ZeroDec()) {
+		return sdk.ZeroDec(), false, nil
+	}
+
+	// Loan-to-Value ratio
+	return borrowCoinValues.Sum().Quo(sumDeposits), true, nil
+}
+
+// UpdateItemInLtvIndex updates the key a borrower's address is stored under in the LTV index
+func (k Keeper) UpdateItemInLtvIndex(ctx sdk.Context, prevLtv sdk.Dec,
+	shouldRemoveIndex bool, borrower sdk.AccAddress) error {
+	currLtv, shouldInsertIndex, err := k.GetCurrentLTV(ctx, borrower)
+	if err != nil {
+		return err
+	}
+
+	if shouldRemoveIndex {
+		k.RemoveFromLtvIndex(ctx, prevLtv, borrower)
+	}
+	if shouldInsertIndex {
+		k.InsertIntoLtvIndex(ctx, currLtv, borrower)
+	}
+	return nil
+}
+
 func getDenoms(coins sdk.Coins) []string {
 	denoms := []string{}
 	for _, coin := range coins {
--- a/x/harvest/keeper/repay.go
+++ b/x/harvest/keeper/repay.go
@ -9,11 +9,17 @@ import (

 // Repay borrowed funds
 func (k Keeper) Repay(ctx sdk.Context, sender sdk.AccAddress, coins sdk.Coins) error {
+	// Get current stored LTV based on stored borrows/deposits
+	prevLtv, shouldRemoveIndex, err := k.GetCurrentLTV(ctx, sender)
+	if err != nil {
+		return err
+	}
+
 	// Sync interest so loan is up-to-date
-	k.SyncBorrowInterest(ctx, sender, coins)
+	k.SyncOustandingInterest(ctx, sender)

 	// Validate requested repay
-	err := k.ValidateRepay(ctx, sender, coins)
+	err = k.ValidateRepay(ctx, sender, coins)
 	if err != nil {
 		return err
 	}
@ -36,6 +42,8 @@ func (k Keeper) Repay(ctx sdk.Context, sender sdk.AccAddress, coins sdk.Coins) e
 	borrow.Amount = borrow.Amount.Sub(payment)
 	k.SetBorrow(ctx, borrow)

+	k.UpdateItemInLtvIndex(ctx, prevLtv, shouldRemoveIndex, sender)
+
 	// Update total borrowed amount
 	k.DecrementBorrowedCoins(ctx, payment)

--- a/x/harvest/keeper/repay_test.go
+++ b/x/harvest/keeper/repay_test.go
@ -10,6 +10,7 @@ import (
 	tmtime "github.com/tendermint/tendermint/types/time"

 	"github.com/kava-labs/kava/app"
+	"github.com/kava-labs/kava/x/harvest"
 	"github.com/kava-labs/kava/x/harvest/types"
 	"github.com/kava-labs/kava/x/pricefeed"
 )
@ -186,6 +187,9 @@ func (suite *KeeperTestSuite) TestRepay() {

 			var err error

+			// Run BeginBlocker once to transition MoneyMarkets
+			harvest.BeginBlocker(suite.ctx, suite.keeper)
+
 			// Deposit coins to harvest
 			depositedCoins := sdk.NewCoins()
 			for _, depositCoin := range tc.args.depositCoins {
--- a/x/harvest/types/errors.go
+++ b/x/harvest/types/errors.go
@ -65,4 +65,6 @@ var (
 	ErrBorrowNotLiquidatable = sdkerrors.Register(ModuleName, 29, "borrow not liquidatable")
 	// ErrInsufficientCoins error for when there are not enough coins for the operation
 	ErrInsufficientCoins = sdkerrors.Register(ModuleName, 30, "unrecoverable state - insufficient coins")
+	// ErrInsufficientBalanceForBorrow error for when the requested borrow exceeds user's balance
+	ErrInsufficientBalanceForBorrow = sdkerrors.Register(ModuleName, 31, "insufficient balance")
 )
--- a/x/harvest/types/keys.go
+++ b/x/harvest/types/keys.go
@ -44,6 +44,7 @@ var (
 	PreviousAccrualTimePrefix         = []byte{0x08} // denom -> time
 	TotalReservesPrefix               = []byte{0x09} // denom -> sdk.Coin
 	BorrowIndexPrefix                 = []byte{0x10} // denom -> sdk.Dec
+	LtvIndexPrefix                    = []byte{0x11}
 	sep                               = []byte(":")
 )

@ -67,6 +68,11 @@ func ClaimTypeIteratorKey(depositType ClaimType, denom string) []byte {
 	return createKey([]byte(depositType), sep, []byte(denom))
 }

+// GetBorrowByLtvKey is used by the LTV index
+func GetBorrowByLtvKey(ltv sdk.Dec, borrower sdk.AccAddress) []byte {
+	return append(ltv.Bytes(), borrower...)
+}
+
 func createKey(bytes ...[]byte) (r []byte) {
 	for _, b := range bytes {
 		r = append(r, b...)