What is the real purpose of Uniswap V4's "hooks"?

Written by: 0xTodd

Recently, I saved some money on Uniswap V4, so I seriously researched the hooks of Uni. Many people have privately told me that after Uni launched V4, they didn't 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 is difficult to directly hold accountable.

Rather than being literally translated as "hook", I personally think it would be better translated as "plugin". A hook itself is meant to add functionalities that go beyond what Uni itself offers. The documentation emphasizes at length when a hook can be called, but most people are not concerned about that; it would be better to explain what a hook can actually do.

Examples of the use of 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 charge more fees during busy times and fewer fees during idle times;

Alternatively, it can even allow your pool to operate without the X*Y=K curve (PS: it is estimated that it was stimulated by Curve at the time).

In summary, you can freely develop all sorts of features that you need, which the Uni team may never release.

It's somewhat like the Creative Workshop on Steam, where the official support has stopped, allowing others to create freely.

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

You write a hook that others can pay to use when they build 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 includes hundreds of hooks, showing how much various hooks have earned. Currently, one of the most commonly used hooks is Flaunch, and I see the developer has already made over $1 million.

What is it for? With its hook, you can allocate the pool's transaction fee to your own wallet at any ratio when creating a pool for meme coins, for example, 80% to your wallet and 20% for buybacks.

Fortunately, when Trump's son issued $Trump, he didn't know about this feature, otherwise he would have pointed all expenses towards the future world finance?

Furthermore, as the saying goes, only competitors understand you the best. Later, Pancake decisively introduced hooks, but instead of calling it V4, it is referred to as Pancake Infinity. Of course, that's another story for another time. In short, hooks are quite an interesting thing, deserving of the name V4.