What is the real purpose of Uniswap V4’s “hook”?

Author: 0xTodd Source: X, @0x_Todd

Recently I saved some money in Uniswap V4, so I studied Uni's hook carefully. Many people actually told me privately that after Uni launched V4, they didn't feel the same sense of surprise as when V3 was launched. The main reason is that the concept of "hook" itself is too abstract and should be directly blamed.

Instead of being literally translated as "hook", in my humble opinion, it is better to translate it as "plug-in". The hook itself adds some functions to the pool that go beyond Uni itself. Its documentation repeatedly emphasizes when the hook can be called, but most people don't really care. It's better to talk about what the hook can do.

【Examples of Hook Uses】

• For example, it allows you to build a pool, such as ETH-USDT, which can only be used by certain specific addresses;

• Or, it allows your pool to charge more fees when it is busy and less fees when it is idle;

• Or, it can even allow your pool to not use the X*Y=K curve (PS: I guess it was stimulated by Curve at the time).

In short, you can freely develop all kinds of functions that you need, which the Uni official may never launch.

It's a bit like the creative workshop on Steam, which is no longer officially done, allowing others to create freely.

Another change is that in the past, there were only two profitable niches on Uni, LP and traders, and the two were emptying each other's pockets. After V4, there are hooks, which actually allow some script kiddies to also have a profit position.

You write a hook, and others can pay to use your hook when they build a pool (selling... hooks...?). Each pool can use 1 hook plug-in, but 1 set of hook plug-ins can be subscribed to countless pools, and the marginal cost is quite low. There is a website called Hook Rank that includes hundreds of hooks, and you can see how much money various hooks have made. At present, one of the most commonly used hooks is Flaunch. I think the developer has made more than 1 million US dollars.

What does it do? Using its hook, you can point any proportion of the pool's handling fee to your own wallet when creating a pool for meme coins, for example, 80%, and then 20% for repurchase.

Fortunately, Trump's son didn't know about this function when he issued $Trump, otherwise he wouldn't have pointed all the fees to the future world finance?

In addition, as the saying goes, only your competitors understand you best. Later, Pancake also decisively introduced the hook, but it was not called V4 but Pancake infinity. Of course, this is another story. Let's talk about it when we have time. All in all, the hook is still an interesting thing, worthy of the name V4.