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Uniswap V4 Intent Hook

Overview

This project was an exploration into the use of hooks for intent based solving. The goal was to implement an intent based hook, that would allow a pool to receive swaps, publish them to a solver network to find the best price for the swap. If a solver returned a more profitable swap (for the swapper) the intent would be executed, the swapper would receive a better return than the pool could offer and the solver would claim the funds. If after the deadline (usually 1 to 2 blocks) no solution with a better return has been provided. Then the swap would be executed as normal upon the pool.

Result of the Project was that due to the way PoolManager enforced netting of token balances, it was difficult to hold the funds for a multi-cycle swap.

Presentation

Below is the presentation submitted for Atrium Academy UHI5.

UHI5 Submission

Email: john@johnwhitton.com

Description: Jincubator IntentSwapHook allows swaps to be created with a delay period before execution, enabling solvers to find a more efficient trade and provide higher-return tokens to the swapper.

Tags: CoW, Cross-Chain, Custom hooks, DEX, LP Liquidity, Unichain

Integrations: Across, Circle, EigenLayer, Flaunch, Ink

Submission Type: Hook Incubator (UHI)

Cohort: UHI5

Created by: John Whitton

How did you integrate our partners, if any?

For the UHI5 project. The focus was on the IntentSwapHook; partner integration is planned for subsequent phases, and I will reach out to each partner with detailed implementation plans. Please see https://deck.jincubator.com for high-level integration overviews with EigenLayer, Circle, Across, Ink, and Flaunch.

What are the key links to share? (Ex. demo video, GitHub, deck)

Github: https://github.com/jincubator/uhi5-protocol

Slides: https://uhi5-deck.jincubator.com/

Project Link: https://jincubator.com/

Demo Video: https://uhi5-demo.jincubator.com/

Problem / Background: What inspired the idea? What problems are you solving?

Liquidity Fragmentation and Capital Efficiency are two of the largest problems as we roll out more protocols and blockchains. This is addressed by two approaches that work together in unison. Intent-based swaps using solvers and Chain Abstraction using Cross-chain Intents (ERC-7683), enabling the seamless flow of funds between chains.

Impact: What makes this project unique? What impact will this make?

This project lays the foundation for any pool to provide a better return for swappers and more capital efficiency for Liquidity Providers. It achieves this by creating a hook that allows swaps to be created with a delay period before execution, enabling solvers to find a more efficient trade and provide higher-return tokens to the swapper.

This is part of a broader technical landscape design to be built on 4 key components

  1. IntentSwap Hook - A hook allowing swaps to be created with a delay period before execution, enabling solvers to find a more efficient trade, giving higher return tokens to the swapper.
  2. Liquidity Indexing - Comprehensive liquidity indexing tooling allowing for a. Indexing of all Protocols b. Simulating swaps over all protocols in milliseconds to find the best trading route c. Execution of swaps via a unified interface
  3. Intent execution framework that enables the trade execution across multiple protocols.
  4. Liquidity rebalancing and settlement tools enabling liquidity providers to rebalance their portfolios across both yield-earning protocols, assets, and chains.

Note: Currently there is no front end but docs can be found at https://jincubator.com

Challenges: What was challenging about building this project?

The solutions space is quite large, making prioritizing which components to build for this project challenging. As such, sponsor integrations were deprioritized and have only a high-level specification rather than a working proof of concept.

Secondly, this space is rapidly evolving with new tooling and solutions becoming available. Specifically, Intent execution frameworks like Uniswap's the-compact and Liquidity Indexing solutions, such as Tycho’s SDK, are still under development and

Team: Who is on the team? What are their backgrounds?

Development is being lead by John Whitton, below are some handy links about him.

  • github: Johns github profile
  • johnwhitton.com: All about John, his work, writing, research etc.
  • My Resume: One-page resume in pdf format.
  • Overview: A little infographic of John's history
  • Writing and Research: Some writing and research John has done (a little outdated)
  • Uniswap v4: Completed exercises and references for the Uniswap Hook Incubator

Repository

The repository resides at uhi5-protocol Below are some sample scenarios

Scenarios

Gives an Overview of the Actors, Contracts and Scenarios for Jincubator.

Actors

  • Liquidity Provider: Provides Liquidity
  • Swapper: Performs Swaps
  • Solver: Finds Most Efficient Swaps
  • Jincubator: Deploys UniswapHook and Liquidity Pools - may have privileged owner functions for prototyping.

Contracts

  • UniswapHook
  • Pools
    • ETH/USD - Reference Pool
    • ETH/USD - Intent Pool using Uniswap Hook

The-compact

  • Sponsors(depositors): Sponsors own the underlying assets and create resource locks to make them available under specific conditions.
    • Swapper
    • Liquidity Provider
  • Arbiters: Arbiters verify conditions and process claims.
  • Claimants(e.g. Fillers): Claimants are the recipients.
  • Relayers: Relayers can perform certain interactions on behalf of sponsors and/or claimants.
  • Allocators (Infrastructure): Allocators are crucial infrastructure for ensuring resource lock integrity.
  • Emmisaries: Sponsors can also optionally assign an emissary to act as a fallback signer for authorizing claims against their compacts. This is particularly helpful for smart contract accounts or other scenarios where signing keys might change.

Protocol Deployment

Liquidity Provisioning

  1. Pool (providing tokens to a pool)
  2. Pool Manager (providing tokens to the pool manager to be used dynamically)
  3. Compact (to be used by Solvers for Swaps using Pools)
  4. Compact (to be used by Solvers for Direct Swaps based on Price Oracle and Profit)

Pool

Yield Earning Vaults (ERC-4626)

Assets for Solving Intents

Intent Swap - No LP Funds

  1. Swapper creates Swap which creates a compact for the output tokens required (locks funds)
    1. Pricing comes from ....
  2. Solver listens to the event calls simulate and finds the best price (a swap on a pool using Swappers Funds)
  3. Solver gets exclusivity
  4. Solver executes the swap using swappers funds and returning output tokens to swapper

Intent Swap - LP funds

  1. LP Provides funds for Solving to the-compact and permissions solver
  2. Swapper creates Swap which creates a compact for the output tokens required (locks funds)
    1. Pricing comes from ....
  3. Solver listens to the event calls simulate and finds the best price
    1. Option 1 - a swap on a pool using Swappers Funds
    2. Option 2 - a direct swap using LP's funds
  4. Solver gets exclusivity
  5. Solver executes the swap
    1. Option 1 - Using Swappers funds and returning tokens to swapper
    2. Option 2 - Using LP's funds and returning funds to the-compact
  6. Settlement
    1. FastTrak
    2. Batch
  7. Rebalancing
    1. Rebalancing Job

Swap Vanilla

Swap Booster

Async Swap and then Solve (double spend)

  1. Swapper creates a swap on Uniswap v4 Pool (Booster Pool or Vanilla Pool)
  2. Input tokens are held based on Time Delay (say 10 blocks)
  3. Intent is created by Solver locking LP funds for Input Token and Output Token Amount above - gas fees and profit % 4a. Intent is executed (note this is outside of Pool, other option is to pass solve calldata to Pool and execute solve in Pool)
    1. LP deposits liquidity in the form of Output Token with intentId (CompactId)
    2. Deposited Output Tokens are given to the original swapper and Locked Input Tokens are given to the Solver 4b. Intent is not executed and swap is attempted at time of deadline.

Swap then Solve (lock funds and then double spend)

Async Swap then Solve

Swap and Solve (Pass Payload Data In)

Compact Introduction.

Swap Intent Based

Swap 1 ETH for max USDC on Unichain

  1. Swap is created
    1. Locks ETH on PoolManager
    2. Create compact for Solver to use 1 ETH if they can provide $2470 USDC or more
    3. Emits event for Intent Creation
  2. Solver provides Solution
    1. Accesses Funds (provide our own initially)
    2. Does Swap
    3. Proves have satisfied condition

Cross Chain Swap

ReHypothecation

Liquidity Settlement