How it works

The kernel#

Uniswap v4 lets a pool name a hook: a contract the pool manager calls around every trade. Every Arcsmith pool names the same hook, the kernel. The kernel keeps, for each pool, a frozen list of up to five blocks with their settings, and asks them what to do on every trade.

Blocks#

A block is a small contract that answers a question: what should this trade cost? It can add to the fee before a swap, burn a share of a buy after it, refuse a trade, or refuse a liquidity deposit. Blocks are pure calculators:

• The kernel calls them read-only (STATICCALL), so they can't move funds, change anything or call the pool.
• Each call gets a fixed budget of 100,000 gas. A block that fails or runs out is skipped for that trade.
• A block's memory for a pool (for example, recent sell pressure) is one value the kernel stores and hands back on the next trade.

What happens on one trade#

1. 1

   The pool calls the kernel

   Before the swap, with its size and direction.
2. 2

   The kernel asks each block

   Blocks return a fee addition, a rejection, or nothing.
3. 3

   The kernel applies its limits

   Fee = base fee + additions, capped at 50% during a pool's first 15 minutes and 10% after.
4. 4

   The swap runs

   At that fee, which goes to the pool's liquidity.
5. 5

   After the swap

   Blocks may ask to burn part of a buy (capped at 5%) or reject the trade now that its size is known.

Frozen rules#

A pool's blocks and settings are written once, when the pool opens, and there is no function to change them. Retiring a block from the catalog only stops new pools from choosing it; pools already using it keep it.

Two lanes#