Written by: 0xTodd
Recently, I saved some money in Uniswap V4, so I studied Uni's hooks seriously. Many people have privately told me that after Uni launched V4, they did not feel the same amazement as when V3 went live. The main reason is that the concept of 'hooks' itself is too abstract and has to bear the blame.
Rather than being directly translated as 'hook,' I personally think it would be better translated as 'plugin.' Hooks themselves add some functions beyond what Uni offers. Its documentation emphasizes at what times hooks can be called, but most people don't care; it would be better to explain what hooks can actually do.
[Examples of the use of hooks]
For example, it can allow the pool you create, such as ETH-USDT, to be used only by certain specific addresses.
Or, it can allow your pool to charge more fees during busy times and less during idle times.
Or, it could even allow your pool to operate without the curve X*Y=K (PS: probably stimulated by Curve at the time).
In short, you can freely develop all kinds of functions that you need, which Uni's officials may never launch.
It's a bit like the creative workshop on Steam, where the officials have stopped doing it, 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, with hooks, it actually allows some script guys to have profitable positions as well.
You write a hook, and others can pay to use your hook when they create pools (selling... hooks?). Each pool can use one hook plugin, but one set of hook plugins can be subscribed to by countless pools, with very low marginal cost. There is a website called Hook Rank that lists 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 developers have already earned over a million dollars.
What is it used for? With its hooks, you can create a pool for meme coins and direct the pool's fees in any proportion, such as 80% to your own wallet and 20% for buyback.
Fortunately, when Trump's son sent $Trump, he didn't know about this feature; otherwise, wouldn't he direct all expenses towards the future world finance?
Moreover, as the saying goes, only competitors understand you best. Later, Pancake also decisively introduced hooks, though not called V4 but rather Pancake infinity. Of course, that's another story to discuss when we have time. In short, hooks are quite interesting and deserving of the name V4.
