PIP-17: Adjust Emission Rate (#58)

.github/workflows/test.yml

@@ -35,9 +35,13 @@ jobs:
               run: |
                   forge --version
                   forge build --sizes
+              env:
+                MAINNET_RPC_URL: ${{ secrets.MAINNET_RPC_URL }}
               id: build
 
             - name: Run Forge tests
               # ! revert back to FOUNDRY_PROFILE=intense forge test -vvv
               run: forge test -vvv
+              env:
+                MAINNET_RPC_URL: ${{ secrets.MAINNET_RPC_URL }}
               id: test

src/DefaultEmissionManager.sol

@@ -11,12 +11,12 @@ import {PowUtil} from "./lib/PowUtil.sol";
 /// @title Default Emission Manager
 /// @author Polygon Labs (@DhairyaSethi, @gretzke, @qedk, @simonDos)
 /// @notice A default emission manager implementation for the Polygon ERC20 token contract on Ethereum L1
-/// @dev The contract allows for a 3% mint per year (compounded). 2% staking layer and 1% treasury
+/// @dev The contract allows for a 2.5% mint per year (compounded). 1.5% staking layer and 1% treasury
 /// @custom:security-contact [email protected]
 contract DefaultEmissionManager is Ownable2StepUpgradeable, IDefaultEmissionManager {
     using SafeERC20 for IPolygonEcosystemToken;
 
-    uint256 public constant INTEREST_PER_YEAR_LOG2 = 0.04264433740849372e18;
+    uint256 public constant INTEREST_PER_YEAR_LOG2 = 0.03562390973072122e18; // log2(1.025)
     uint256 public constant START_SUPPLY = 10_000_000_000e18;
     address private immutable DEPLOYER;
 
@@ -27,6 +27,9 @@ contract DefaultEmissionManager is Ownable2StepUpgradeable, IDefaultEmissionMana
     IPolygonEcosystemToken public token;
     uint256 public startTimestamp;
 
+    // NEW STORAGE 1.2.0
+    uint256 public START_SUPPLY_1_2_0;
+
     constructor(address migration_, address stakeManager_, address treasury_) {
         if (migration_ == address(0) || stakeManager_ == address(0) || treasury_ == address(0)) revert InvalidAddress();
         DEPLOYER = msg.sender;
@@ -38,6 +41,11 @@ contract DefaultEmissionManager is Ownable2StepUpgradeable, IDefaultEmissionMana
         _disableInitializers();
     }
 
+    function reinitialize() external reinitializer(2) {
+        START_SUPPLY_1_2_0 = token.totalSupply();
+        startTimestamp = block.timestamp;
+    }
+
     function initialize(address token_, address owner_) external initializer {
         // prevent front-running since we can't initialize on proxy deployment
         if (DEPLOYER != msg.sender) revert();
@@ -62,7 +70,8 @@ contract DefaultEmissionManager is Ownable2StepUpgradeable, IDefaultEmissionMana
         uint256 amountToMint = newSupply - currentSupply;
         if (amountToMint == 0) return; // no minting required
 
-        uint256 treasuryAmt = amountToMint / 3;
+        // 2/5 of 2.5% is 1% going to the treasury
+        uint256 treasuryAmt = amountToMint * 2 / 5;
         uint256 stakeManagerAmt = amountToMint - treasuryAmt;
 
         emit TokenMint(amountToMint, msg.sender);
@@ -75,15 +84,15 @@ contract DefaultEmissionManager is Ownable2StepUpgradeable, IDefaultEmissionMana
     }
 
     /// @inheritdoc IDefaultEmissionManager
-    function inflatedSupplyAfter(uint256 timeElapsed) public pure returns (uint256 supply) {
+    function inflatedSupplyAfter(uint256 timeElapsed) public view returns (uint256 supply) {
         uint256 supplyFactor = PowUtil.exp2((INTEREST_PER_YEAR_LOG2 * timeElapsed) / 365 days);
-        supply = (supplyFactor * START_SUPPLY) / 1e18;
+        supply = (supplyFactor * START_SUPPLY_1_2_0) / 1e18;
     }
 
     /// @inheritdoc IDefaultEmissionManager
     function version() external pure returns (string memory) {
-        return "1.1.0";
+        return "1.2.0";
     }
 
-    uint256[48] private __gap;
+    uint256[47] private __gap;
 }

src/interfaces/IDefaultEmissionManager.sol

@@ -40,7 +40,7 @@ interface IDefaultEmissionManager {
     /// approximate the compounded interest rate using x^y = 2^(log2(x)*y)
     /// where x is the interest rate per year and y is the number of seconds elapsed since deployment divided by 365 days in seconds
     /// log2(interestRatePerYear) = 0.04264433740849372 with 18 decimals, as the interest rate does not change, hard code the value
-    function inflatedSupplyAfter(uint256 timeElapsedInSeconds) external pure returns (uint256 inflatedSupply);
+    function inflatedSupplyAfter(uint256 timeElapsedInSeconds) external view returns (uint256 inflatedSupply);
 
     /// @notice returns the version of the contract
     /// @return version version string

test/DefaultEmissionManager.t.sol

@@ -55,6 +55,8 @@ contract DefaultEmissionManagerTest is Test {
         vm.prank(governance);
         migration.acceptOwnership();
         emissionManager.initialize(address(polygon), governance);
+        emissionManager.reinitialize();
+
         // POL being emissionary, while MATIC having a constant supply,
         // the requirement of unmigrating POL to MATIC for StakeManager on each mint
         // is satisfied by a one-time transfer of MATIC to the migration contract
@@ -144,16 +146,17 @@ contract DefaultEmissionManagerTest is Test {
 
         assertApproxEqAbs(newSupply, polygon.totalSupply(), _MAX_PRECISION_DELTA);
         uint256 totalAmtMinted = polygon.totalSupply() - initialTotalSupply;
-        uint256 totalAmtMintedOneThird = totalAmtMinted / 3;
-        assertEq(matic.balanceOf(stakeManager), totalAmtMinted - totalAmtMintedOneThird);
+        uint256 totalAmtMintedTwoFifth = totalAmtMinted * 2 / 5;
+        assertEq(matic.balanceOf(stakeManager), totalAmtMinted - totalAmtMintedTwoFifth);
         assertEq(matic.balanceOf(treasury), 0);
         assertEq(polygon.balanceOf(stakeManager), 0);
-        assertEq(polygon.balanceOf(treasury), totalAmtMintedOneThird);
+        assertEq(polygon.balanceOf(treasury), totalAmtMintedTwoFifth);
     }
 
     function test_MintDelayTwice(uint128 delay) external {
         vm.assume(delay <= 5 * 365 days && delay > 0);
 
+        // now that we actually pass this to calc.js, we only need to set it once.
         uint256 initialTotalSupply = polygon.totalSupply();
 
         skip(delay);
@@ -164,13 +167,12 @@ contract DefaultEmissionManagerTest is Test {
         uint256 newSupply = abi.decode(vm.ffi(inputs), (uint256));
 
         assertApproxEqAbs(newSupply, polygon.totalSupply(), _MAX_PRECISION_DELTA);
-        uint256 balance = (polygon.totalSupply() - initialTotalSupply) / 3;
+        uint256 balance = (polygon.totalSupply() - initialTotalSupply) * 2 / 5;
         uint256 stakeManagerBalance = (polygon.totalSupply() - initialTotalSupply) - balance;
         assertEq(matic.balanceOf(stakeManager), stakeManagerBalance);
         assertEq(polygon.balanceOf(stakeManager), 0);
         assertEq(polygon.balanceOf(treasury), balance);
 
-        initialTotalSupply = polygon.totalSupply(); // for the new run
         skip(delay);
         emissionManager.mint();
 
@@ -180,10 +182,10 @@ contract DefaultEmissionManagerTest is Test {
 
         assertApproxEqAbs(newSupply, polygon.totalSupply(), _MAX_PRECISION_DELTA);
         uint256 totalAmtMinted = polygon.totalSupply() - initialTotalSupply;
-        uint256 totalAmtMintedOneThird = totalAmtMinted / 3;
+        uint256 totalAmtMintedTwoFifth = totalAmtMinted * 2 / 5;
 
-        balance += totalAmtMintedOneThird;
-        stakeManagerBalance += totalAmtMinted - totalAmtMintedOneThird;
+        balance = totalAmtMintedTwoFifth;
+        stakeManagerBalance = totalAmtMinted - totalAmtMintedTwoFifth;
 
         assertEq(matic.balanceOf(stakeManager), stakeManagerBalance);
         assertEq(polygon.balanceOf(stakeManager), 0);
@@ -195,10 +197,10 @@ contract DefaultEmissionManagerTest is Test {
 
         uint256 balance;
         uint256 stakeManagerBalance;
+        // now that we actually pass this to calc.js, we only need to set it once.
+        uint256 initialTotalSupply = polygon.totalSupply();
 
         for (uint256 cycle; cycle < cycles; cycle++) {
-            uint256 initialTotalSupply = polygon.totalSupply();
-
             skip(delay);
             emissionManager.mint();
 
@@ -208,10 +210,10 @@ contract DefaultEmissionManagerTest is Test {
 
             assertApproxEqAbs(newSupply, polygon.totalSupply(), _MAX_PRECISION_DELTA);
             uint256 totalAmtMinted = polygon.totalSupply() - initialTotalSupply;
-            uint256 totalAmtMintedOneThird = totalAmtMinted / 3;
+            uint256 totalAmtMintedTwoFifth = totalAmtMinted * 2 / 5;
 
-            balance += totalAmtMintedOneThird;
-            stakeManagerBalance += totalAmtMinted - totalAmtMintedOneThird;
+            balance = totalAmtMintedTwoFifth;
+            stakeManagerBalance = totalAmtMinted - totalAmtMintedTwoFifth;
 
             assertEq(matic.balanceOf(stakeManager), stakeManagerBalance);
             assertEq(polygon.balanceOf(stakeManager), 0);
@@ -224,6 +226,6 @@ contract DefaultEmissionManagerTest is Test {
         inputs[2] = vm.toString(delay);
         inputs[3] = vm.toString(polygon.totalSupply());
         uint256 newSupply = abi.decode(vm.ffi(inputs), (uint256));
-        assertApproxEqAbs(newSupply, emissionManager.inflatedSupplyAfter(block.timestamp + delay), 1e20);
+        assertApproxEqAbs(newSupply, emissionManager.inflatedSupplyAfter(delay), 1e20);
     }
 }

test/upgrade/DefaultEmissionManager.1.2.0.t.sol

@@ -0,0 +1,80 @@
+// SPDX-License-Identifier: MIT
+pragma solidity 0.8.21;
+
+import {PolygonEcosystemToken} from "src/PolygonEcosystemToken.sol";
+import {DefaultEmissionManager} from "src/DefaultEmissionManager.sol";
+import {PolygonMigration} from "src/PolygonMigration.sol";
+import {ERC20PresetMinterPauser} from "openzeppelin-contracts/contracts/token/ERC20/presets/ERC20PresetMinterPauser.sol";
+import {
+    ProxyAdmin,
+    TransparentUpgradeableProxy,
+    ITransparentUpgradeableProxy
+} from "openzeppelin-contracts/contracts/proxy/transparent/ProxyAdmin.sol";
+import {Test} from "forge-std/Test.sol";
+
+// this test forks mainnet and tests the upgradeability of DefaultEmissionManagerProxy
+
+contract DefaultEmissionManagerTest is Test {
+    uint256 mainnetFork;
+
+    address POLYGON_PROTOCOL_COUNCIL = 0x37D085ca4a24f6b29214204E8A8666f12cf19516;
+    address EM_PROXY = 0xbC9f74b3b14f460a6c47dCdDFd17411cBc7b6c53;
+    address COMMUNITY_TREASURY = 0x2ff25495d77f380d5F65B95F103181aE8b1cf898;
+    address EM_PROXY_ADMIN = 0xEBea33f2c92D03556b417F4F572B2FbbE62C39c3;
+    PolygonEcosystemToken pol = PolygonEcosystemToken(0x455e53CBB86018Ac2B8092FdCd39d8444aFFC3F6);
+
+    uint256 NEW_INTEREST_PER_YEAR_LOG2 = 0.03562390973072122e18; // log2(1.025)
+
+    string[] internal inputs = new string[](5);
+
+    function setUp() public {
+        string memory MAINNET_RPC_URL = vm.envString("MAINNET_RPC_URL");
+        mainnetFork = vm.createFork(MAINNET_RPC_URL);
+    }
+
+    function testUpgrade() external {
+        vm.selectFork(mainnetFork);
+
+        address newTreasury = makeAddr("newTreasury");
+
+        DefaultEmissionManager emProxy = DefaultEmissionManager(EM_PROXY);
+
+        assertEq(emProxy.treasury(), COMMUNITY_TREASURY);
+
+        address migration = address(emProxy.migration());
+        address stakeManager = emProxy.stakeManager();
+
+        DefaultEmissionManager newEmImpl = new DefaultEmissionManager(migration, stakeManager, newTreasury);
+
+        ProxyAdmin admin = ProxyAdmin(EM_PROXY_ADMIN);
+
+        vm.prank(POLYGON_PROTOCOL_COUNCIL);
+
+        admin.upgradeAndCall(
+            ITransparentUpgradeableProxy(address(emProxy)),
+            address(newEmImpl),
+            abi.encodeWithSelector(DefaultEmissionManager.reinitialize.selector)
+        );
+
+        // initialize can still not be called
+        vm.expectRevert("Initializable: contract is already initialized");
+        emProxy.initialize(makeAddr("token"), msg.sender);
+
+        assertEq(pol.totalSupply(), emProxy.START_SUPPLY_1_2_0());
+        assertEq(block.timestamp, emProxy.startTimestamp());
+
+        // emission is now 2.5%
+        inputs[0] = "node";
+        inputs[1] = "test/util/calc.js";
+        inputs[2] = vm.toString(uint256(365 days));
+        inputs[3] = vm.toString(pol.totalSupply());
+        // vm.ffi executes the js script which contains the new emission rate
+        uint256 newSupply = abi.decode(vm.ffi(inputs), (uint256));
+        assertApproxEqAbs(newSupply, emProxy.inflatedSupplyAfter(365 days), 1e20);
+
+        // treasury has been updated
+        assertEq(emProxy.treasury(), newTreasury);
+        // emission has been updated
+        assertEq(emProxy.INTEREST_PER_YEAR_LOG2(), NEW_INTEREST_PER_YEAR_LOG2);
+    }
+}

test/util/calc.js

@@ -1,9 +1,10 @@
-const interestRatePerYear = 1.03;
-const startSupply = 10_000_000_000e18;
+const emissionRatePerYear = 1.025;
+
 function main() {
     const [timeElapsedInSeconds] = process.argv.slice(2);
+    const [startSupply] = process.argv.slice(3);
 
-    const supplyFactor = Math.pow(interestRatePerYear, timeElapsedInSeconds / (365 * 24 * 60 * 60));
+    const supplyFactor = Math.pow(emissionRatePerYear, timeElapsedInSeconds / (365 * 24 * 60 * 60));
     const newSupply = BigInt(startSupply * supplyFactor);
 
     console.log("0x" + newSupply.toString(16).padStart(64, "0")); // abi.encode(toMint)