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Tax Collector

See TaxCollector.sol for more details.

1. Introduction​

The Tax Collector is the module that handles the collection of taxes. It is responsible for the following:

  • Storing the interest rate for each collateral type.
  • Storing the tax revenue receivers.
  • Calculating and distributing the tax revenue.

2. Contract Details​

Key Methods:​

Public

  • taxSingle: Calculates and distributes the tax revenue for a single collateral type.
  • taxMany: Calculates and distributes the tax revenue for a set of collateral types.

Contract Parameters:​

Global

  • SAFE Engine: Is called to update the accumulated rate for each collateral type.
  • Primary Tax Receiver: Receives tax revenue for all collateral types.
  • globalStabilityFee: Global stability fee applied to all collateral types.
  • maxStabilityFeeRange: Maximum range for the stability fee to differ from 1 (no fee).

Per Collateral Type

  • Secondary Tax Receivers: Addresses (and tax percentage) that receive revenue for the collateral type total stability fees.
  • stabilityFee: Stability fee applied only to the collateral type.

3. Key Mechanisms & Concepts​

Primary and Secondary Tax Receivers​

The contract holds 2 types of tax receivers:

  • Primary Tax Receiver: Is a shared address across all the collateral types. It receives the remaining tax revenue after the secondary tax receivers have been paid.
  • Secondary Tax Receivers: Is a set of addresses per collateral type, that can be set to receive a fixed percentage amount of the tax revenue of the collateral type.

Global and Per Collateral Stability Fees​

The tax (or Stability Fee) can be configured in 2 ways:

  • Global Stability Fee: Shared across all the collateral types.
  • Per Collateral Stability Fee: Set for each collateral type.

The final stability fee computed for a collateral type is the multiplication of both fees. To avoid retroactivity, the tax collecting routine first reads the previously stored stability fee, and then calculates and stores the new one.

4. Gotchas​

5. Failure Modes​

Parameters misconfiguration:​

  • maxStabilityFeeRange too high may result in a bad calculation of the stability fee, resulting in broken collateral types (as their accumulated rate will be too low/high).
  • maxStabilityFeeRange too low may result in a bounded value for the stability fee, bounding the final stability fee to a value very similar to 1 (no stability fee).
  • maxSecondaryTaxReceivers too low may result in not being able to add a secondary tax receiver to a collateral type.
  • Stability fees (global * perCollateral) too high may result in users not interested in generating debt.
  • Stability fees too low may result in the protocol not being able to generate enough revenue to cover the system expenses.