Hook System

The Zora protocol uses specialized Uniswap V4 hooks to automatically manage pool interactions and reward distribution for different coin types.

Overview

The hook system consists of two specialized hook contracts that inherit from BaseZoraV4CoinHook:

• ContentCoinHook - Automatically manages pools for Content Coins with full referral reward distribution
• CreatorCoinHook - Automatically manages pools for Creator Coins with simplified reward distribution

Both hooks automatically implement fee collection, currency conversion, and reward distribution on every swap transaction.

Inheritance Structure

The hook system uses inheritance to share common functionality while allowing specialized reward distribution:

BaseZoraV4CoinHook (Abstract Base)

Contains all core hook functionality shared between coin types:

• Pool initialization and automatic liquidity position creation
• Automatic fee collection from all LP positions on every swap
• Multi-hop currency conversion through optimal swap paths
• Hook upgrade and migration support
• Comprehensive event emission and transaction logging

• Uniswap V4 afterInitialize and afterSwap hook permissions
• Doppler multi-curve liquidity positioning
• Trusted message sender validation
• Pool-to-coin mapping and position tracking

ContentCoinHook (Inherits from Base)

Implements specialized reward distribution for Content Coins by overriding the _distributeMarketRewards() function:

• Full referral rewards: Both create referral (15%) and trade referral (15%)
• Creator rewards: 50% of market rewards
• Doppler rewards: 5% of market rewards
• Protocol rewards: Remaining percentage

CreatorCoinHook (Inherits from Base)

Implements simplified reward distribution for Creator Coins by overriding the _distributeMarketRewards() function:

• Creator rewards: 50% of market rewards
• Protocol rewards: 50% of market rewards
• No referral or Doppler rewards

Key Insight: The only difference between the two hooks is their reward distribution methodology - all other functionality (pool management, fee collection, currency conversion, migration) is identical and handled by the base contract.

Deployment Addresses

Hook Permissions

Both hooks have the following Uniswap V4 permissions:

function getHookPermissions() external pure override returns (Hooks.Permissions memory) {
    return Hooks.Permissions({
        beforeInitialize: false,
        afterInitialize: true,      // ✅ Enabled
        beforeAddLiquidity: false,
        afterAddLiquidity: false,
        beforeRemoveLiquidity: false,
        afterRemoveLiquidity: false,
        beforeSwap: false,
        afterSwap: true,           // ✅ Enabled
        beforeDonate: false,
        afterDonate: false,
        beforeSwapReturnDelta: false,
        afterSwapReturnDelta: false,
        afterAddLiquidityReturnDelta: false,
        afterRemoveLiquidityReturnDelta: false
    });
}

Core Functionality

After Initialize Hook

When a new pool is initialized, the hooks automatically:

1. Validate Pool Setup: Ensure the pool is properly configured for the coin type
2. Create Initial Positions: Set up liquidity positions based on the coin's configuration
3. Register Pool: Link the pool to the appropriate coin contract
4. Configure Reward Distribution: Set up the reward distribution mechanism

After Swap Hook

On every swap, the hooks automatically:

1. Collect LP Fees: Gather accrued fees from all liquidity positions
2. Convert to Payout Currency: Swap collected fees through optimal paths
3. Distribute Rewards: Allocate rewards based on coin type and configuration
4. Emit Events: Log detailed swap and reward information

Reward Distribution

The hooks automatically implement different reward distribution logic for different coin types:

Content Coins

Total Fee Split: 33.33% reminted as LP rewards, 66.67% distributed as market rewards

Market Rewards Distribution:

• Creator: 50% (5000 BPS)
• Create Referral: 15% (1500 BPS)
• Trade Referral: 15% (1500 BPS)
• Doppler: 5% (500 BPS)
• Protocol: ~15% (remaining)

Creator Coins

Total Fee Split: 33.33% reminted as LP rewards, 66.67% distributed as market rewards

Market Rewards Distribution:

• Creator: 50% (5000 BPS)
• Protocol: 50% (remaining)

Note: Creator Coins do not have referral or Doppler rewards

Multi-Hop Reward Swapping

The hooks automatically support complex swap paths for coins that aren't directly paired with the final payout currency:

Example: Content Coin → Creator Coin → ZORA

1. Content Coin fees automatically collected in Content Coin tokens
2. First hop: Content Coin → Creator Coin (backing currency)
3. Second hop: Creator Coin → ZORA token (final payout currency)
4. Distribution: ZORA tokens automatically distributed to reward recipients

This automatically enables complex token economies where Content Coins can be backed by Creator Coins, which are in turn backed by ZORA tokens.

Liquidity Management

The hooks automatically manage liquidity positions throughout the pool lifecycle:

Automatic Position Creation

During pool initialization, the hooks automatically create:

• Discovery Positions: Initial price discovery ranges
• Market Positions: Main trading ranges
• Multi-Position Support: Complex liquidity curves with multiple ranges

Position Structure

struct LiquidityPosition {
    int24 tickLower;           // Lower price bound
    int24 tickUpper;           // Upper price bound
    uint128 liquidity;         // Liquidity amount
    uint256 feeGrowthInside0X128; // Fee tracking
    uint256 feeGrowthInside1X128; // Fee tracking
}

Migration Support

The hooks automatically support controlled liquidity migration to enable upgrades to new hook versions while preserving all existing liquidity.

• Complete Migration Guide - Step-by-step migration process and security considerations
• Migration Flow Diagram - Visual sequence diagram of the migration process
• Migration Events - Event emission details for tracking migrations

Events

Swapped Event

event Swapped(
    address indexed sender,
    address indexed swapSender,
    bool isTrustedSwapSenderAddress,
    PoolKey key,
    bytes32 indexed poolKeyHash,
    SwapParams params,
    int128 amount0,
    int128 amount1,
    bool isCoinBuy,
    bytes hookData,
    uint160 sqrtPriceX96
);

Emitted on every swap with detailed transaction information including:

• sender: The address that initiated the swap transaction
• swapSender: The original message sender (may differ from sender if using trusted message senders)
• isTrustedSwapSenderAddress: Whether the sender is registered as a trusted message sender
• key: The complete pool key identifying the pool
• poolKeyHash: Indexed hash of the pool key for efficient filtering
• params: The swap parameters (amount, direction, etc.)
• amount0/amount1: The actual token amounts exchanged
• isCoinBuy: Whether this swap is purchasing the coin (true) or selling it (false)
• hookData: Additional data passed to the hook (often contains referral information)
• sqrtPriceX96: The final sqrt price after the swap

CoinMarketRewardsV4 Event

event CoinMarketRewardsV4(
    address coin,
    address currency,
    address payoutRecipient,
    address platformReferrer,
    address tradeReferrer,
    address protocolRewardRecipient,
    address dopplerRecipient,
    MarketRewardsV4 marketRewards
);

Emitted when market rewards are distributed from collected fees, showing exact amounts to each recipient:

• coin: The coin contract that generated the rewards
• currency: The currency in which rewards are paid out
• payoutRecipient: The creator's reward recipient address
• platformReferrer: Address receiving platform referral rewards (Content Coins only)
• tradeReferrer: Address receiving trade referral rewards (Content Coins only)
• protocolRewardRecipient: Protocol treasury address
• dopplerRecipient: Doppler rewards recipient (Content Coins only)
• marketRewards: Detailed breakdown of reward amounts for each recipient

LpReward Event

event LpReward(
    address indexed coin,
    address indexed currency,
    uint256 amountCurrency,
    int24 tick,
    uint128 liquidity
);

Emitted when liquidity provider rewards are reminted back into the pool:

• coin: The coin contract generating the LP rewards
• currency: The currency of the reminted LP position
• amountCurrency: The amount of currency reminted as new liquidity
• tick: The current pool tick when the reward was reminted
• liquidity: The amount of liquidity reminted back into the pool

This event tracks the 33.33% portion of collected fees that are automatically reminted as liquidity rather than distributed as market rewards.