DynamicFee Hook

A Uniswap V4 hook that dynamically adjusts LP fees based on swap size. Part of v4hooks.dev.

Overview

This hook demonstrates the beforeSwap lifecycle with fee override capability. Optimized for micro-swaps in educational pools with limited liquidity (~$50).

Token Pair: CLANKER / WETH on Base Mainnet

Swap Size	Fee	Tier
< 0.0001 ETH	0.01%	Micro
0.0001 - 0.001 ETH	0.05%	Small
0.001 - 0.005 ETH	0.10%	Medium
> 0.005 ETH	0.30%	Large

How It Works

1. Hook intercepts swap - beforeSwap is called with swap parameters
2. Calculate fee tier - Based on amountSpecified, determine the fee
3. Override fee - Return fee with OVERRIDE_FEE_FLAG to replace pool's base fee

Key Concepts

• DYNAMIC_FEE_FLAG: Pool must be created with this flag to allow fee overrides
• OVERRIDE_FEE_FLAG: Returned fee must be OR'd with this to signal override
• beforeSwap only: No delta modification, just fee adjustment

Project Structure

dynamicfee/
├── src/
│   └── DynamicFee.sol         # Hook contract
├── test/
│   ├── DynamicFee.t.sol       # Tests
│   └── utils/                 # Test utilities
├── script/
│   ├── 00_DeployHook.s.sol    # Deploy hook
│   ├── 01_CreatePool.s.sol    # Create pool with DYNAMIC_FEE_FLAG
│   └── 02_Swap.s.sol          # Test swaps
├── frontend/                   # Next.js frontend
│   ├── app/
│   ├── components/
│   └── lib/
└── README.md

Development

Prerequisites

• Foundry
• Node.js >= 18

Setup

# Install dependencies
forge install

# Build
forge build

# Test
forge test -vvv

Frontend

cd frontend
npm install
npm run dev

Deployment

1. Deploy Hook

# Copy environment file
cp .env.example .env

# Edit .env with your keys
# Then deploy
forge script script/00_DeployHook.s.sol --rpc-url base_mainnet --broadcast

2. Update Hook Address

After deployment, update the hook address in:

• script/01_CreatePool.s.sol
• script/02_Swap.s.sol
• frontend/lib/contracts.ts
• frontend/app/page.tsx

3. Create Pool

forge script script/01_CreatePool.s.sol --rpc-url base_mainnet --broadcast

4. Deploy Frontend

cd frontend
npm run build
# Deploy to Vercel

Contract

DynamicFee.sol

contract DynamicFee is BaseHook {
    // Fee tiers - optimized for micro-swaps
    uint24 public constant BASE_FEE = 100;      // 0.01%
    uint24 public constant MEDIUM_FEE = 500;    // 0.05%
    uint24 public constant HIGH_FEE = 1000;     // 0.10%
    uint24 public constant MAX_FEE = 3000;      // 0.30%

    // Thresholds for micro-swaps
    uint256 public constant SMALL_THRESHOLD = 0.0001 ether;
    uint256 public constant MEDIUM_THRESHOLD = 0.001 ether;
    uint256 public constant LARGE_THRESHOLD = 0.005 ether;

    function _beforeSwap(...) internal override returns (bytes4, BeforeSwapDelta, uint24) {
        uint256 swapSize = _abs(params.amountSpecified);
        uint24 fee = _calculateFee(swapSize);

        return (
            BaseHook.beforeSwap.selector,
            BeforeSwapDeltaLibrary.ZERO_DELTA,
            fee | LPFeeLibrary.OVERRIDE_FEE_FLAG
        );
    }
}

Hook Permissions

Permission	Enabled	Purpose
beforeSwap	Yes	Intercept and override fee
beforeSwapReturnDelta	No	Not modifying amounts
All others	No	Not needed

License

MIT

Author

Built by Igor Yuzovitskiy as part of v4hooks.dev.