What is the real use of Uniswap V4's "hook"?

Hook was born out of Uniswap, surpassing Uniswap.

Written by: 0xTodd

Recently, I saved some money on Uniswap V4, so I seriously studied the hooks of Uni. Many people have actually told me privately that after Uni launched V4, they did not feel the same sense of amazement as when V3 went live. The main reason is that the concept of “hooks” itself is too abstract, and it has to take the blame directly.

Rather than being literally translated as “hook,” I personally believe it would be better to interpret it as “plugin.” A hook itself is designed to add functionalities to the pool that go beyond what Uni offers. The documentation emphasizes at length when a hook can be called, but most people do not care about that; it would be better to explain what a hook can actually do.

Examples of Uses for Hooks

• For example, it allows you to create pools, such as ETH-USDT, that can only be used by certain specific addresses;
• Alternatively, it can allow your pool to collect more fees during busy times and fewer fees during idle times;
• Alternatively, it could even allow your pool to not use the X*Y=K curve (PS: It’s estimated that it was stimulated by Curve at that time).

In summary, you can freely develop various features that you need, which the Uni official may never launch.

It feels a bit like the Creative Workshop on Steam, where the official support has ceased, allowing others to create freely.

Another change is that in the past, there were only two profitable niches on Uni: LPs and traders, and both were taking from each other’s pockets. After V4, there are hooks, which actually allow some script kids to have profitable positions as well.

You write a hook that others can pay to use when they create pools (selling… hooks?). Each pool can use 1 hook plugin, but 1 set of hook plugins can be subscribed to by countless pools, with a marginal cost that is quite low. There is a website called Hook Rank that contains hundreds of hooks, showing how much money various hooks have earned. Currently, one of the most commonly used hooks is Flaunch, and I see the developer has already earned over 1 million dollars.

What is it for? With its hook, you can set the pool’s fees to any ratio when creating a pool for meme coins, for example, directing 80% to your own wallet and 20% for buyback.

Fortunately, when Trump’s son issued $Trump, he didn’t know about this feature; otherwise, wouldn’t he point all the expenses towards the future world finance?

Additionally, as the saying goes, only competitors understand you best. Later, Pancake also decisively introduced hooks, but instead of calling it V4, they referred to it as Pancake Infinity. Of course, that’s another story to discuss when we have time. In short, hooks are quite an interesting thing and are enough to be named V4.