Author: Cookie

Since the end of April, the Uniswap v4 hook concept has undoubtedly been the most attention-grabbing "new" concept in the market.

The reason "new" is in quotes is not to say that Uniswap v4 hook is a newly launched feature. In fact, Uniswap v4 was already launched on January 30th of last year.

The new feature of hooks is not ignored, nor is it unused. On the official support front, there are the Uniswap Hook Incubator and the Uniswap Hook Designer Lab, providing funding, training, and incubation support. On the adoption front, there are projects like Flanch and Bunni, and the overall TVL and transaction volume data of the v4 ecosystem are quite good.

However, it wasn't until the recent emergence of projects like $upeg, $sato, and Slonks that hooking sparked widespread discussion among retail investors. Based on this phenomenon, I'll begin by presenting a rather controversial theory—

For a long time, Uniswap's promotion of hooks, at least in terms of attracting attention from retail investors, has been flawed.

If this deviation is corrected, "Hook" could become the starting point for a bull market.

What exactly is a "Hook"?

Let's explain this problem in a simple and easy-to-understand way, which will also lead to another answer—why has "Hook" only attracted the attention of retail investors now?

In the past, our general understanding of Uniswap was that we could put LPs on it and trade (swap). And this was indeed the main source of profit for Uniswap before version 4 (when Hook was introduced).

Many games support player communities creating "plugins" to alter the game's gameplay and attract a wider player base beyond the official modes. For example, in Counter-Strike, without plugins, players are limited to C4 planting/defusing combat. However, with plugins, players can compete in speed, jump distance, or even play soccer or basketball, becoming part of the map and camouflaged for other players to spot.

Hooks are like game plugins, enabling Uniswap to move beyond just the game between LPs and traders. However, these plugins have long lacked appeal for retail investors. They either simply port existing features from other chains or address pain points related to LPs and traders.

This is like adding some game-enhancing plugins to Counter-Strike, such as kill statistics. It does make things better, but it lacks the imagination to attract casual players.

What retail investors want are original and imaginative new ways to play that Uniswap doesn't implement officially, but can achieve through hooks. The concept of hooks itself has been far too abstract for retail investors in the past.

So how is this "imagination" manifested in the three popular projects: $upeg, $sato, and Slonks?

The core of "imagination"

$upeg's core concept is "transaction as art creation and the creation of chaotic supply patterns." First, its image creation philosophy is complete, using on-chain data as input rather than simply copying artistic inspiration from existing NFT series, allowing each integer purchase to become a new creation. Second, the more scattered, small transactions there are, the more difficult it becomes to generate images. This makes it not merely a simple conversion between image and token forms, nor simply "allowing images to exist in token form for better liquidity," but rather shifts the focus to "predicting supply patterns."

If $upeg exists in DEX, CEX, and NFT trading markets, and is both a coin and an image, how will different liquidity sources and different trading methods (spot, futures, LP, or buying images) affect its supply structure?

This is a shift in attention that no other token project in the past years has ever achieved.

Let's look at $sato again. Its core appeal isn't "creating a bonding curve using Uniswap v4 hooks," but rather its precise grasp of what makes a bonding curve on the Ethereum mainnet so attractive.

The points it landed on correctly are:

Decentralization. This isn't another "platform," it's just a contract defined by code.

A massive internal market capitalization. Reaching a market cap of $100 million to graduate would seem like a pipe dream on any chain outside the Ethereum mainnet. But not on the Ethereum mainnet, because people have the impression that this chain has a lot of "old money" and "diamond hands." And this impression will only deepen as the curve advances further.

Zero intervention. Once the curve is complete and the tokens graduate, the contract is abandoned. Subsequent tasks such as pool setup are left to the community to handle.

Bonding curves aren't a new concept, but $Sato presents the one that best fits the characteristics of the ETH mainnet, shifting players' attention from bonding curves to a "game of faith."

While there are many positive voices for Slonks, such as "incorporating AI concepts" and "the developer is the co-founder of ETHS", I believe its core appeal to retail players is that "it provides a sufficiently meme-worthy game mechanic".

Slonks' images are derived from redrawing CryptoPunks using an on-chain neural network model. Since it's drawn by AI, there will inevitably be biases, and the developer believes that the resulting confusion is a form of art. The less the drawing resembles the original, the higher the "slop (low quality) value."

This value ranges from 0 to 576 because CryptoPunks are 24x24 pixels, and each pixel deviation represents one slop value. Since there are a total of 10,000 Slonks NFTs, the theoretical maximum total slop value is 576 * 10,000 = 5,760,000, which is also the maximum supply of $SLOPs.

Holders can either burn the NFT and receive $SLOP based on its corresponding slop value, or merge two Slonks NFTs to create a less similar one that can be exchanged for more $SLOP. Alternatively, they can burn $SLOP to exchange for an AI-redrawn NFT with an unknown slop value.

Essentially, this is a "game of strategy and luck".

Why are hooks needed?

So here's the question: Can't we achieve the same results using $upeg, $sato, or Slonks without Uniswap v4 hooks? Why bother with a hook layer?

Indeed, even without hooks, these projects can be implemented as independent projects. However, Uniswap needs these projects to attract retail users, and these projects can also thrive by leveraging Uniswap's ecosystem and concepts.

This wasn't necessary, but it was indeed a very fitting and mutually beneficial relationship. If $upeg hadn't used hooks in the beginning, and hadn't attracted the attention of the Uniswap team, this wave of hook narrative enthusiasm might never have existed.

As individual investors, while "Uniswap v4 hook" is a concept that everyone can easily understand, we shouldn't blindly rush in just because we see "hook." What we need to consider more is whether a project with the "hook" concept has a fresh and unique gameplay and a complete narrative. This determines how likely a "hook" project is to gain Uniswap's attention and support.

Only when players have high enough selection criteria, Uniswap is determined enough to make hooks its own application marketplace on Ethereum, and developers have enough creativity, can we truly say that "Hooks" will become the track that starts a bull market.