From 2b9bf1b46657f031096f439c43cc03f4527a67ca Mon Sep 17 00:00:00 2001
From: rndrntwrk <180591682+rndrntwrk@users.noreply.github.com>
Date: Fri, 1 May 2026 00:02:15 -0500
Subject: [PATCH] fix(amm): settle lvr markets from duel oracle

---
 .../contracts/lvr_amm/LvrMarket.sol           | 10 ++--
 packages/evm-contracts/test/LvrMarket.t.sol   | 55 +++++++++++++++++++
 2 files changed, 60 insertions(+), 5 deletions(-)

diff --git a/packages/evm-contracts/contracts/lvr_amm/LvrMarket.sol b/packages/evm-contracts/contracts/lvr_amm/LvrMarket.sol
index a4c7f384..d04f295c 100644
--- a/packages/evm-contracts/contracts/lvr_amm/LvrMarket.sol
+++ b/packages/evm-contracts/contracts/lvr_amm/LvrMarket.sol
@@ -127,14 +127,14 @@ contract LvrMarket is ReentrancyGuard {
     function settleMarket() external isRouter nonReentrant {
         require(state == MarketState.PENDING, "Invalid Market State");
         require(block.timestamp >= resolutionTimestamp, "Challenge Window Open");
-        // Return bond to proposer with Reward collected through market fees
-        state = MarketState.RESOLVED;
-        IERC20(collateralToken).safeTransfer(proposer, bondValue); // Add fees and then reward the proposer
-
-        emit MarketSettled(outcome, proposer, bondValue);
+        _settleFromOracle();
     }
 
     function settleFromOracle() external isRouter nonReentrant {
+        _settleFromOracle();
+    }
+
+    function _settleFromOracle() private {
         require(state == MarketState.OPEN || state == MarketState.PENDING || state == MarketState.DISPUTED, "Invalid Market State");
 
         // Capture proposer's outcome before overwriting (for bond slashing)
diff --git a/packages/evm-contracts/test/LvrMarket.t.sol b/packages/evm-contracts/test/LvrMarket.t.sol
index ec9a5efd..10d433a6 100644
--- a/packages/evm-contracts/test/LvrMarket.t.sol
+++ b/packages/evm-contracts/test/LvrMarket.t.sol
@@ -219,6 +219,61 @@ contract LvrMarketTest is Test {
         router.settleMarket(marketAddr);
     }
 
+    function test_ManualSettlementCannotResolveWithoutOracleResult() public {
+        bytes32 duelKey = keccak256("manual-settle-no-oracle-result");
+
+        vm.prank(admin);
+        router.create("Manual Oracle Gate", "Desc", "Src", duelKey, false, DURATION, 100 * 10**18);
+        address marketAddr = _lastMarketAddress();
+        LvrMarket market = LvrMarket(marketAddr);
+
+        vm.warp(block.timestamp + DURATION);
+
+        uint256 bond = market.bondValue();
+        vm.prank(user1);
+        mUSD.approve(address(router), bond);
+        vm.prank(user1);
+        router.proposerOutcome(marketAddr, 0);
+
+        vm.warp(block.timestamp + 5 minutes + 1);
+
+        vm.expectRevert(bytes("Oracle duel not resolved"));
+        router.settleMarket(marketAddr);
+
+        (LvrMarket.MarketState currentState,,,,,,,) = market.getMarketDetails();
+        assertEq(uint256(currentState), uint256(LvrMarket.MarketState.PENDING), "market should stay pending");
+    }
+
+    function test_SettleMarketUsesOracleOutcomeAfterManualProposal() public {
+        bytes32 duelKey = keccak256("manual-settle-oracle-authority");
+        _setupOracleDuel(duelKey);
+
+        vm.prank(admin);
+        router.create("Manual Oracle Override", "Desc", "Src", duelKey, false, DURATION, 100 * 10**18);
+        address marketAddr = _lastMarketAddress();
+        LvrMarket market = LvrMarket(marketAddr);
+
+        vm.warp(block.timestamp + DURATION);
+
+        uint256 bond = market.bondValue();
+        vm.prank(user1);
+        mUSD.approve(address(router), bond);
+        vm.prank(user1);
+        router.proposerOutcome(marketAddr, 0);
+
+        _proposeAndFinalizeOracle(duelKey, DuelOutcomeOracle.Side.B);
+
+        uint256 treasuryBefore = mUSD.balanceOf(treasury);
+        uint256 proposerBefore = mUSD.balanceOf(user1);
+        router.settleMarket(marketAddr);
+
+        (LvrMarket.MarketState currentState,, uint256 mktOutcome,,,,,) = market.getMarketDetails();
+        assertEq(uint256(currentState), uint256(LvrMarket.MarketState.RESOLVED));
+        assertEq(mktOutcome, 1, "manual settlement must use the oracle outcome");
+        assertEq(mUSD.balanceOf(treasury), treasuryBefore + bond, "wrong proposer bond should be slashed");
+        assertEq(mUSD.balanceOf(user1), proposerBefore, "wrong proposer should not receive bond");
+    }
+
     function test_RedeemCollateralPaysWinningSide() public {
         bytes32 duelKey = keccak256("redeem-winning-side");
         _setupOracleDuel(duelKey);