A malicious hook doesn't need a UI to scam you.
👉 It just needs to look like the best quote.
After analyzing over 84,000 v4 hooks, we determined only 19% of hooks to be safe.
It's time to get real about hooks.
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hey @duncancmt ... you up??? 👀
200 lines per week of maniacally hand-crafted code and somehow still time for a CHM interview and presentation
Duncan, principal engineer at @0xProject and ex-CTO & co-founder of Immunefi
We thank you for your service!🫡
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A malicious hook doesn't need a UI to scam you.
👉 It just needs to look like the best quote.
After analyzing over 84,000 v4 hooks, we determined only 19% of hooks to be safe.
It's time to get real about hooks.
I guess a good way to put it would be this. Making a hook is a little bit like launching your own DEX easily (launchpad but for DEXes?). Great for innovation, but imagine what aggregators think when they need to support 10'000 DEXes with arbitrary code is hard.
And to quote well - they do have to actually model it off-chain. And now, on top of it, they have to figure what's bad and whatnot.
we're going to start using v3 pools on bankr for arbitrum starting this week to test a new fee structure and some new features.
we get about 95% of what we had with hooks plus some new features like fees to holders.
what i don't like about hooks is that every new hook needs various aggregators and routers to support before people can swap your coins.
v3 pools are available instantly everywhere.
you could potentially have a list of sanctioned hooks but any innovation is going to rely on the uniswap, 0x/matcha, dexscreener, geckoterminal teams supporting your hook.
and as this article explains a majority of hooks are malicious.
check.
check.
and check.
Definitive is one of the few terminals that simulates every trade before it hits the chain.
the result: higher rate of success and return through authentic liquidity for the trader.
Today, 0x published an interesting and important article about an emerging phenomenon, first seen in PropAMMs, now in UniV4 hooks.
To summarize: malicious makers alternate between very tight and very wide quotes. Tight quotes get the venue selected by the aggregator, but then when the user's trade gets routed to the venue the quote is wide.
Slippage settings (i.e. limit price) protects some users, causing the trade to just fail, but many users set their slippage settings far too permissively. Those users get taxed brutally - the article highlights some hooks alternating between 0 and 18% fees.
(A few months ago, Solana posted an really excellent article about this same phenomenon occurring on Solana aggregators, although with upper-end fees more like 1% instead of 18%. They quietly took the article down a few days later.)
The promise of open systems is elimination of middlemen and hidden taxes. Aggregator spoofing represents a huge hidden tax, and it can only truly be solved by fully-on-chain order routing.
That in turn requires plentiful computation and flexible account access (i.e. no access lists, no pre-specification of touched accounts like in Solana). You basically need a really performant and efficient EVM. On top of that, you need a well-designed on-chain routing protocol. Who's building this?
check.
check.
and check.
Definitive is one of the few terminals that simulates every trade before it hits the chain.
the result: higher rate of success and return through authentic liquidity for the trader.
A malicious hook doesn't need a UI to scam you.
👉 It just needs to look like the best quote.
After analyzing over 84,000 v4 hooks, we determined only 19% of hooks to be safe.
It's time to get real about hooks.
What if a dice roll set your trading fee between 0% and 18%?
That was happening with some Uniswap v4 hooks.
@0xProject analyzed 84,163 hooks.
Only 19.4% were considered safe.
We put in a phenomenal amount of work to get hooks to work correctly in 0x API, but fundamentally they set bad expectations between hook authors and aggregators. Now we have the data to back up just how bad the problem is.