ExpirySettle

How it works

Any dated instrument that settles against a market price has the same problem at the end of its life. The payoff of pushing the price around is largest in the final minutes, because there is no time left for anybody to push it back, and the cost of pushing it is unchanged from any other moment. Traditional markets answer this with a settlement window: the official price is an average over the closing period rather than a single print, which makes a manipulator pay for the whole window instead of one instant.

A pool cannot average its own price without an oracle, but it can do something a traditional venue cannot: change what moving the price costs. As maturity approaches, this hook ramps the fee from `baseFee` up to `settlementFee` across the last `windowSeconds`, on a curve that is quadratic rather than linear so the final moments are much more expensive than the early part of the window: fee(t) = baseFee + (settlementFee - baseFee) * elapsed^2 / windowSeconds^2 A manipulator who wants to move the settlement print has to choose between acting early, where the fee is low but there is time for somebody to trade against them, and acting late, where nobody can respond but every basis point of the move costs several times more. The fee is paid to the liquidity that has to absorb the move, which is the party bearing the cost.

At maturity the pool stops trading. Swaps revert, so the price cannot move again, and `settlementPrice` is simply the pool's final tick. Liquidity may always be removed, including after maturity, because a matured pool that cannot be exited is a trap rather than an instrument.

Adding liquidity after maturity reverts: there is nothing left to provide liquidity for, and permitting it would only let somebody strand funds. The hook holds nothing, takes nothing for itself, and has no privileged role. The maturity is fixed before the pool exists and cannot be moved by anyone, which is the property that makes the instrument datable at all.

Using it

Uniswap v4 removed hookData from initialize, so per-pool parameters arrive out of band. Fix them for a pool key whose pool does not exist yet, then initialize. Nobody can change them afterwards, including you.

hook.configure(
    key,
    ExpirySettleHook.Config({
        maturity: /* uint64 */ 0,
        windowSeconds: /* uint32 */ 0,
        baseFee: /* uint24 */ 0,
        settlementFee: /* uint24 */ 0
    })
);

poolManager.initialize(key, startingSqrtPriceX96);

The pool's fee field must be LPFeeLibrary.DYNAMIC_FEE_FLAG. The hook rejects a pool initialized without it, which is the most common integration failure.

Parameters

From TypeScript

npm i @hookforge/sdk

import {getHook, hookAddress, poolKeyFor} from "@hookforge/sdk";

const hook = getHook("expiry-settle");
const key  = poolKeyFor({
  hook: hookAddress("expiry-settle", 8453),   // Base
  currencyA: USDC, currencyB: WETH,
  tickSpacing: 60, dynamicFee: true,
});

What it reverts with

The callbacks it claims

Uniswap v4 reads a hook's permissions from the low fourteen bits of its own address, which is why deploying one means mining a CREATE2 salt. This hook claims 3, so every deployment of it has an address ending in 0x1880.

• beforeInitialize
• afterInitialize
• beforeAddLiquidity
• afterAddLiquidity
• beforeRemoveLiquidity
• afterRemoveLiquidity
• beforeSwap
• afterSwap
• beforeDonate
• afterDonate
• beforeSwapReturnsDelta
• afterSwapReturnsDelta
• afterAddLiquidityReturnsDelta
• afterRemoveLiquidityReturnsDelta

It says what it is, on-chain

Nothing about a hook's address tells an indexer, a wallet, a router or an agent what the pool does, which is why hook discovery today is a curated list. This hook answers for itself, in one eth_call, with no registry in the loop.

cast call $HOOK "hookName()(string)"    # ExpirySettle
cast call $HOOK "specURI()(string)"     # https://expiry-settle.pages.dev/hook.json
cast call $HOOK "hookTags()(string[])"  # expiry, settlement, dynamic-fee, derivatives, oracle-free

Build, test and deploy

git clone --recurse-submodules https://github.com/nirholas/expiry-settle
cd expiry-settle
forge build && forge test

# Dry run: mines the salt, prints the address, sends nothing.
forge script script/Deploy.s.sol --rpc-url $RPC_URL

# For real.
forge script script/Deploy.s.sol --rpc-url $RPC_URL --broadcast --verify