From 6569a47e1c98d4bb02fc9cd9f106efc8325c180b Mon Sep 17 00:00:00 2001
From: puneetmahajan <puneet@persistence.one>
Date: Thu, 21 Dec 2023 10:23:13 +0530
Subject: [PATCH] make adjust deposits to throw error instead of nil.

---
 CHANGELOG.md                          |  6 ++++++
 x/liquidstakeibc/keeper/deposit.go    |  3 ++-
 x/liquidstakeibc/keeper/msg_server.go | 18 ++----------------
 x/liquidstakeibc/types/errors.go      |  1 +
 4 files changed, 11 insertions(+), 17 deletions(-)

diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1a8270149..74cdaf63c 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -34,6 +34,12 @@ Ref: https://keepachangelog.com/en/1.0.0/
 
 # Changelog
 
+## Unreleased
+
+### Bug Fixes
+
+- [707](https://github.com/persistenceOne/pstake-native/pull/707) Fix liquidstakeibc redeem edge case for protecting cValue  
+
 ## [v2.8.0] - 2023-12-20
 
 ### Features
diff --git a/x/liquidstakeibc/keeper/deposit.go b/x/liquidstakeibc/keeper/deposit.go
index aafce4b9d..b6722b62e 100644
--- a/x/liquidstakeibc/keeper/deposit.go
+++ b/x/liquidstakeibc/keeper/deposit.go
@@ -1,6 +1,7 @@
 package keeper
 
 import (
+	errorsmod "cosmossdk.io/errors"
 	"strconv"
 
 	"cosmossdk.io/math"
@@ -77,7 +78,7 @@ func (k *Keeper) AdjustDepositsForRedemption(
 ) error {
 	redeemableDeposits, depositsAmount := k.GetRedeemableDepositsForHostChain(ctx, hc)
 	if depositsAmount.LT(redeemableAmount.Amount) {
-		return nil
+		return errorsmod.Wrapf(liquidstakeibctypes.ErrInsufficientDeposits, "deposits are lesser than amount to be redeemed, deposits present %s, required %s", depositsAmount.String(), redeemableAmount.Amount.String())
 	}
 
 	for _, deposit := range redeemableDeposits {
diff --git a/x/liquidstakeibc/keeper/msg_server.go b/x/liquidstakeibc/keeper/msg_server.go
index 1113e770f..6f4b4253f 100644
--- a/x/liquidstakeibc/keeper/msg_server.go
+++ b/x/liquidstakeibc/keeper/msg_server.go
@@ -11,7 +11,6 @@ import (
 	"github.com/cosmos/cosmos-sdk/telemetry"
 	sdktypes "github.com/cosmos/cosmos-sdk/types"
 	sdkerrors "github.com/cosmos/cosmos-sdk/types/errors"
-	authtypes "github.com/cosmos/cosmos-sdk/x/auth/types"
 	govtypes "github.com/cosmos/cosmos-sdk/x/gov/types"
 	stakingtypes "github.com/cosmos/cosmos-sdk/x/staking/types"
 	transfertypes "github.com/cosmos/ibc-go/v7/modules/apps/transfer/types"
@@ -791,20 +790,6 @@ func (k msgServer) Redeem(
 	redeemToken, _ := sdktypes.NewDecCoinFromDec(hc.IBCDenom(), redeemAmount).TruncateDecimal()
 
 	// check if there is enough deposits to fulfill the instant redemption request
-	depositAccountBalance := k.bankKeeper.GetBalance(
-		ctx,
-		authtypes.NewModuleAddress(types.DepositModuleAccount),
-		hc.IBCDenom(),
-	)
-	if redeemToken.IsGTE(depositAccountBalance) {
-		return nil, errorsmod.Wrapf(
-			sdkerrors.ErrInsufficientFunds,
-			"can't instant redeem %s tokens, only %s is available",
-			redeemToken.String(),
-			depositAccountBalance.Amount.String(),
-		)
-	}
-
 	// subtract the redemption amount from the deposits
 	if err := k.AdjustDepositsForRedemption(ctx, hc, redeemToken); err != nil {
 		return nil, errorsmod.Wrapf(
@@ -813,7 +798,8 @@ func (k msgServer) Redeem(
 		)
 	}
 
-	// send the instant redeemed token from module to the account
+	// send the instant redeemed token from module to the account,
+	//this will error out if there are insufficient redeemTokens
 	err = k.bankKeeper.SendCoinsFromModuleToAccount(
 		ctx,
 		types.DepositModuleAccount,
diff --git a/x/liquidstakeibc/types/errors.go b/x/liquidstakeibc/types/errors.go
index 68add5181..fc4c432d0 100644
--- a/x/liquidstakeibc/types/errors.go
+++ b/x/liquidstakeibc/types/errors.go
@@ -27,4 +27,5 @@ var (
 	ErrLSMNotEnabled            = errorsmod.Register(ModuleName, 2019, "host chain has LSM staking disabled")
 	ErrLSMDepositProcessing     = errorsmod.Register(ModuleName, 2020, "already processing LSM deposit")
 	ErrLSMValidatorInvalidState = errorsmod.Register(ModuleName, 2021, "validator invalid state")
+	ErrInsufficientDeposits     = errorsmod.Register(ModuleName, 2022, "insufficent deposits")
 )