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https://github.com/makerdao/exchange-callees

Exchange Callee contracts for LIQ2.0 Flash Loans
https://github.com/makerdao/exchange-callees

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Exchange Callee contracts for LIQ2.0 Flash Loans

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# Exchange Callees

![Build Status](https://github.com/makerdao/exchange-callees/actions/workflows/.github/workflows/tests.yaml/badge.svg?branch=master)



This repository contains exchange callee contracts, which wrap around decentralized exchanges and interact with the [Maker Protocol](https://github.com/makerdao/dss). They are used in conjunction with the `auction-demo-keeper` to demonstrate flash loan functionality within LIQ2.0's collateral auctions.



With built-in flash loans, auction participants can accept a collateral advance from LIQ2.0, send it to an exchange callee contract to be traded for Dai, forward any Dai profit to an external address, and pay back the auction - all in a single transaction. In terms of capital, the participant only needs ETH to pay for gas costs.



**NOTE: These contracts are intended as a code example, and have not been audited or tested in a production environment.**



## Architecture



Each exchange has its own public callee contract, which exposes a function called `clipperCall(owe,slice,data)`. This method is called by the `Clipper` contract, the collateral auction house of LIQ2.0. After receiving internal `gem` (i.e. collateral) from `Clipper`, it conducts the following steps:



1. Converts internal `gem` to ERC20 `gem`

2. Approves exchange to pull ERC20 `gem`

3. Trades ERC20 `gem` for ERC20 `dai`

4. Forwards any ERC20 `gem` (if present) to external address

5. Converts ERC20 `dai` to internal `dai` and sends to msg.sender

6. Forwards ERC20 `dai` profit (if present) to external address

7. Sends internal `dai` to `Clipper` for repayment (occurs in `Clipper.take`)



NOTE:

* NEVER DIRECTLY SEND internal/ERC20 `gem`/`dai` to an exchange callee contract.

* Remember to call `vat.hope(clipper)` from the msg.sender once before calling `Clipper.take`



## Exchanges supported

* [OasisDex](https://oasisdex.com/)

* [UniswapV2](https://uniswap.org/) (Only ETH collateral types are supported at the moment)



## Public addresses



The addresses of the currently deployed contracts can be found in the [`/addresses.json`](./addresses.json) file.



## Improvements

To slow down or defend against [generalized frontrunning bots](https://medium.com/@danrobinson/ethereum-is-a-dark-forest-ecc5f0505dff), consider:

- Deploying an ownable `exchange-callee` contract and add an `auth` modifier to `clipperCall()`, so only the owner (you) can call the function

- Using a mempool-shielded transaction service, as outlined in [this blog post](https://samczsun.com/escaping-the-dark-forest/)



## Testing

Requires [Forge](https://github.com/foundry-rs/foundry)

```

$ forge install

$ make test

```



## Disclaimer

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