On June 13, Uniswap, the largest decentralized exchange by global trade volume, published a summary of Version 4 (v4) along with an early code implementation. The team highlighted a key feature: hooks, which allow highly customizable liquidity pools.
Hooks Enable Endless Customization
Uniswap envisions v4 as core financial infrastructure built in public for community feedback. The most prominent addition is hooks—plugins that customize how pools, swaps, fees, and LP positions interact. Developers can build custom AMM pools on top of Uniswap’s liquidity and security, integrating with v4 smart contracts.
Examples of hook-enabled features include time-weighted average market makers (TWAMM), dynamic fees based on volatility, onchain limit orders, depositing out-of-range liquidity into lending protocols, and custom onchain oracles. Other possibilities: auto-compounding LP fees back into positions and internalizing MEV profits to distribute back to LPs. Uniswap believes these ideas only scratch the surface.
“Really, the sky’s the limit. Because each pool is now defined by more than just the tokens and fee tier, we’ll see pools of all colors, shapes, and sizes.” The core logic of v4 remains non-upgradeable, but each pool can use its own hook contract with permissions set at creation.
Licensing and Governance
Uniswap v4 code is released under a Business Source License 1.1, restricting commercial or production use for up to four years. After that, it transitions to a GPL license in perpetuity. As with v3, Uniswap Governance and Uniswap Labs retain the right to grant exemptions. This approach balances commercial protection with eventual full open-source availability, fostering ecosystem innovation.
The launch of Uniswap v4 marks a major milestone for DEXs, pushing the boundaries of decentralized finance. The developer community eagerly anticipates hooks enabling a new generation of liquidity strategies and financial products.