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known_effects_of_hooks_permissions.md

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Known Effects of Hook Permissions

List of things that hooks could do that could be malicious or frustrating to users. Based on this. Examples are here

Note JIT -> "just in time" liquidity. Liquidity thats added immediately before a swap to get LP fees. Often then removed again immediately after the swap.

Content

Hooks without Custom Accounting

beforeSwap

  • cause a revert (either through pushing the price, just reverting outright, or removing liquidity)
  • frontrun the user's swap, pushing user to their max slippage
  • cause a partial fill (by removing liquidity)
  • JIT causing other in-range LPs to reap fewer fees

TODO add examples for each case

afterSwap

  • cause a revert
  • backrun

TODO add examples for each case

beforeSwap+afterSwap

  • a guaranteed (risk-free) sandwich of the swap
  • a guaranteed (risk-free) JIT of liquidity causing other in-range LPs to reap less reward

TODO add examples for each case

beforeAddLiquidity

  • cause a revert
  • cause the ration of the two tokens owed to the pool to be different than expected by swapping to different price

TODO add examples for each case

afterAddLiquidity

  • cause a revert

TODO add examples for each case

beforeRemoveLiquidity

  • cause a revert, implying user funds could be permanently locked and fees to be never collected

TODO add examples for each case

afterRemoveLiquidity

  • cause a revert, implying user funds could be permanently locked and fees to be never collected

TODO add examples for each case

beforeDonate

  • cause a revert

TODO add examples for each case

afterDonate

  • cause a revert

TODO add examples for each case

before+afterDonate

sandwich a donation and potentially capture all of it

TODO add examples for each case

Custom Accounting Hooks

beforeSwap returns delta

the below can ONLY happen if the hook also has the beforeSwap Hook

exactInput swaps

  • can push swapper to max slippage (ie if the router reverts when maxOutput < deltaUnspecified, a hook can set deltaUnspecified to maxOutputAmount)
  • can "take" all specified token without crediting the user with anything (should be checked in the router)
  • can take full unspecified amount (if nonzero) (should be checked in the router)
  • on low liquidity pools, note an example for a badly written hook that blindly credits without checking liquidity status. A user can always take the full creditable amount from the hook, and in this case it happens without the user paying anything.

    • lets say a hook gives the user an extra 1% of amountSpecified to every trade

    • lets say a the pool only has liquidity for 1 ETH -> 1500 USDC left available

      1. a user trades 100 ETH exact input, the hook contributes 1 ETH
      2. the pool tries to trade 101 ETH exact input, but only 1 ETH liquidity is available to trade on the pool
      3. 1 ETH is taken from the hook and credited to the pool manager, and the user pays (1 ETH - 1 ETH) 0 ETH input, and is given all 3500 USDC output

TODO add examples for each case

exactOutput swaps

  • can push swapper to max slippage (ie if the router reverts when maxInput > deltaUnspecified, a hook can set delta Unspecified to maxInputAmount - 1)
  • can take full unspecified amount, CANNOT take any of specified amount (should be checked in the router)
  • on low liquidity pools, note an example for a badly written hook that blindly credits without checking liquidity status. A user can always take the full creditable amount from the hook.

    • lets say a hook gives the user an extra 1% of amountSpecified to every trade

    • lets say a the pool only has liquidity for 1 ETH -> 1500 USDC left available

      1. a user trades 700000 USDC exactOutput, the hook gives 7000 USDC output
      2. the pool tries to trade 693000 USDC output, but only 3500 is available for 1 ETH input
      3. the user is charged 1 ETH, and is given (7000 + 3500) (10500) USDC

TODO add examples for each case

afterSwap returns delta

The bellow can happen only if the hook also has the afterSwap hook

-can take full unspecified token from user (should be checked in the router)

TODO add examples for each case

afterAddLiquidity returns delta

The bellow can happen only if the hook also has the afterAddLiquidity hook

  • can take extra amounts of token0 and token1 (fee on add) (should be checked in the router)
  • can pay for the amounts of token0 and token1 on behalf of user (on add)

TODO add examples for each case

afterRemoveLiquidity returns delta

The bellow can happen only if the hook also has the afterRemoveLiquidity hook

  • can take full amounts in both tokens from user(should be checked in the router)

TODO add examples for each case