Overview Of Brokkr Hooks For UniswapV4
At the end of the last year, we received a Uniswap Foundation grant to build 4 proof of concept hooks for the new UniswapV4 🦄
✨ Hooks are like liquidity pool plugins that give special powers ✨
Liquidity pools usually offer just management of the liquidity, generating yield for LPs, and enabling trading. With hooks, these are not the limits anymore. Hooks can enable liquidity incentives, limit orders, streaming swaps, or anything connected to the liquidity pool. All can be built directly within Uniswap.
Our hooks are aimed at increasing profitability for liquidity providers. The majority of LPs is struggling with being profitable while providing liquidity unless they’re heavily incentivized, but Hooks can change that.
On top of that, our yield farming strategies will benefit from these hooks when UniV4 launches.
What our hooks can do?👇
Locking Liquidity & Incentives Hook
This hook enables locking liquidity in the pool and rewards users for it. The liquidity is deposited in a full range (V2-like pool) and the liquidity rewards can be in any token or NFT. This hook also lets LPs withdraw early for a fee that’s distributed to other LPs.
Liquidity incentives will play a major role in attracting liquidity to V4 pools, and currently there are no options of adding own liquidity incentives outside of Merkl.
Why are incentives important
➕ Attracting more users
➕ Stable liquidity depth over time
➕ Customizable rewards and distribution
➕ Early unlocks possible for a fee
Dynamic Fees By Volume Hook
Improving liquidity providers profitability, that’s what this hook is all about. In this concept, we adjust swapping fees based on the incoming volume which is used as a proxy for volatility. Liquidity providers suffer the most losses during times of high volatility that leads to frequent position rebalancing and realizing (im)permanent loss. By using volume, the hook captures more value during volatile periods and distributed that increased profit back to LPs.
Main benefits
➕ Limits impermanent loss
➕ Increases LP profits
➕ Gas not intensive, compared to other Dynamic fee mechanisms
Liquidity Management Hook
This hook automates position management for liquidity providers, similar to an Automated Liquidity Management (ALM) platform. The goal of this hook is to make liquidity providing seamless and more profitable for the LPs.
Concentrated liquidity pools are demanding and require manual management. It is also hard to remain profitable as impermanent loss, LVR, and rebalancing costs eat a big part of the generated fees. Automating the position management can increase LPs profits and make liquidity providing seamless as in the V2 pool.
Main benefits
➕ ALM services directly within the pool
➕ Automated position management
➕ Autocompounding generated fees
Combining Locking Liquidity & Incentives Hooks
Liquidity locking hooks meets the dynamic fees hook. It rewards users who lock their liquidity and adjusts the pool fees based on the volume.
Generally, one hook means one feature, but what if you want to use more features in one pool (dynamic fees, TWAMM, order book, etc.)? Then you need to combine the hooks to offer all their features in one hook. By combining (compatible) hooks, all kinds of pool features can be enabled for which you needed a separate protocol before. This lets builders create dApps directly on Uniswap.
Main Benefits
➕ ➕ ➕ All benefits from the previous hooks combined 🤝 🔥
Want to dive even deeper? Check out articles about each of the hooks👇
1️⃣ Locking Liquidity hook
2️⃣ Dynamic Fees hook
3️⃣ Liquidity Management hook
4️⃣ Dynamic Fees + Liquidity Locking hook
UniswapV4 release is planned for Q3 and we will make the hooks production ready. Liquidity incentives, Dynamic fees, or Liquidity management hooks improve the liquidity providing experience and increase the LP profitability.
They will also provide great yield farming opportunities for our strategies and let us partner with other protocols that will want to launch on UniswapV4.
Stay in touch! 🤝 Follow Brokkr on:
🌐 BRO Website
🐦 BRO Twitter
👾 BRO Discord
