What Are V4 Hooks?
Hooks are external smart contracts that Uniswap V4 pools can call at specific lifecycle events. Think of them as plugins that add custom functionality to the base AMM logic. Each pool can optionally use a hook contract.
This modular design transforms Uniswap from a fixed protocol into a platform. Developers can build custom AMM behaviors without forking the entire codebase, and users can choose pools with features that match their needs.
Hook Callback Points
beforeSwap / afterSwap
Execute logic before or after every swap. Use for dynamic fees, MEV protection, or custom pricing.
beforeAddLiquidity / afterAddLiquidity
Control liquidity provision. Enable permissioned pools or custom LP incentives.
beforeRemoveLiquidity / afterRemoveLiquidity
Logic around withdrawals. Implement lockups or withdrawal fees.
beforeInitialize / afterInitialize
Setup logic when pool is created. Initialize custom state or requirements.
Types of Hooks
Dynamic Fee Hooks
Adjust swap fees based on volatility, time of day, or pool utilization. Higher fees during volatility protect LPs; lower fees during calm periods attract volume.
TWAMM Hooks
Time-Weighted Average Market Maker. Execute large orders over time to minimize price impact. Essential for institutions and whales.
Limit Order Hooks
On-chain limit orders that execute when price crosses a threshold. No more off-chain order books or keeper networks required.
Oracle Hooks
Custom price oracles or TWAP calculations. Integrate Chainlink, Pyth, or custom feeds for MEV-resistant pricing.
KYC/Whitelist Hooks
Permissioned pools for compliant trading. Restrict access to KYC'd addresses for RWA tokens or regulated assets.
Singleton Architecture
V4 introduces a singleton contract that holds all pools, replacing V3's one-contract-per-pool model. This enables "flash accounting"—settling only net token transfers at the end of a transaction.
Gas Savings Example
V3: ETH → USDC → LINK (3-hop)
Each hop = separate contract call + token transfers. High gas.
V4: Same route
Internal accounting for intermediate steps. Only net transfer at end. Up to 99% gas reduction on multi-hops.
Trading Implication
Lower gas costs make complex routes viable. Aggregators can find better prices through more hops. Small trades become economical. This significantly improves execution quality.
Impact on Trading
What Changes for Traders
New Opportunities
Early Hook Adoption
New hooks launch with low liquidity. Early LPs earn high fees, early traders get better prices. Monitor hook deployments for first-mover advantages.
Fee Optimization
Dynamic fee pools may offer lower fees during low volatility. Time large trades to calm periods. Compare fees across V4 hooks vs V3 fixed fees.
TWAMM for Size
Execute large orders (>$100k) through TWAMM hooks to minimize slippage. Split over hours or days automatically. No more manual order splitting.
Risks & Considerations
Hook Risks
- • Malicious hooks: Could steal funds, manipulate prices, or front-run
- • Unaudited code: New hooks may have bugs or vulnerabilities
- • Complexity: More moving parts = more potential failure modes
- • Liquidity fragmentation: Many hook variants may split liquidity
Due Diligence Checklist
Interactive Hooks Explorer
Explore different hook types and their use cases:
Dynamic Fee Hook
Adjusts swap fees based on volatility or time
Primary Use Case
Volatility-based pricing
V4 vs V3 Improvements
- • Fixed fee tiers only
- • No custom logic
- • Separate pool per pair
- • Dynamic fees via hooks
- • Custom pre/post swap logic
- • Singleton contract (gas savings)
Trading Alpha from V4
- • TWAMM hooks reduce slippage for large orders
- • Dynamic fee pools may have better pricing during low vol
- • Limit order hooks enable passive DEX strategies
- • Watch for new hook deployments—early liquidity advantages
Related Articles
Frequently Asked Questions
Hooks are smart contracts that can execute custom logic at specific points in a pool's lifecycle: before/after swaps, before/after liquidity changes, and during pool initialization. They enable features impossible in V3 like dynamic fees, on-chain limit orders, and custom oracles.
Hooks enable: dynamic fees that adjust to volatility, TWAMM for large order execution, on-chain limit orders, MEV protection through custom routing, and permissioned pools. Traders get better execution options; LPs get more sophisticated fee strategies.
V4 uses a single contract (singleton) for all pools instead of separate contracts per pool like V3. This dramatically reduces gas costs for multi-hop swaps and enables flash accounting—settling net balances rather than individual transfers.
Hooks introduce new risks: malicious hooks could steal funds or manipulate prices. Only use pools with audited, reputable hooks. The hook address encodes its permissions (which callbacks it can use), providing some transparency. Always DYOR on hook contracts.
Use V4 for: large orders (TWAMM hooks), volatile assets (dynamic fee hooks), limit orders, or when you want specific hook features. Use V3 for maximum battle-tested security on blue chips or when V4 liquidity is thin. Both will coexist.