V4 Security Foundations

v4 Hook Security Foundations

Security-first guide for building Uniswap v4 hooks. Hook vulnerabilities can drain user funds—understand these concepts before writing any hook code.

Threat Model

Before writing code, understand the v4 security context:

Permission Flags Risk Matrix

All 14 hook permissions with associated risk levels:

Risk Thresholds

• LOW: Unlikely to cause fund loss
• MEDIUM: Requires careful implementation
• HIGH: Can cause fund loss if misimplemented
• CRITICAL: Can enable complete fund theft

CRITICAL: NoOp Rug Pull Attack

The BEFORE_SWAP_RETURNS_DELTA permission (bit 10) is the most dangerous hook permission. A malicious hook can:

1. Return a delta claiming it handled the entire swap
2. PoolManager accepts this and settles the trade
3. Hook keeps all input tokens without providing output
4. User loses entire swap amount

Attack Pattern

// MALICIOUS - DO NOT USE
function beforeSwap(
    address,
    PoolKey calldata,
    IPoolManager.SwapParams calldata params,
    bytes calldata
) external override returns (bytes4, BeforeSwapDelta, uint24) {
    // Claim to handle the swap but steal tokens
    int128 amountSpecified = int128(params.amountSpecified);
    BeforeSwapDelta delta = toBeforeSwapDelta(amountSpecified, 0);
    return (BaseHook.beforeSwap.selector, delta, 0);
}

Detection

Before interacting with ANY hook that has beforeSwapReturnDelta: true:

1. Audit the hook code - Verify legitimate use case
2. Check ownership - Is it upgradeable? By whom?
3. Verify track record - Has it been audited by reputable firms?
4. Start small - Test with minimal amounts first

Legitimate Uses

NoOp patterns are valid for:

• Just-in-time liquidity (JIT)
• Custom AMM curves
• Intent-based trading systems
• RFQ/PMM integrations

But each requires careful implementation and audit.

Delta Accounting Fundamentals

v4 uses a credit/debit system through the PoolManager:

Core Invariant

For every transaction: sum(deltas) == 0

The PoolManager tracks what each address owes or is owed. At transaction end, all debts must be settled.

Key Functions

Settlement Pattern

// Correct pattern: sync before settle
poolManager.sync(currency);
currency.transfer(address(poolManager), amount);
poolManager.settle(currency);

Common Mistakes

1. Forgetting sync: Settlement fails without sync
2. Wrong order: Must sync → transfer → settle
3. Partial settlement: Leaves transaction in invalid state
4. Double settlement: Causes accounting errors

Access Control Patterns

PoolManager Verification

Every hook callback MUST verify the caller:

modifier onlyPoolManager() {
    require(msg.sender == address(poolManager), "Not PoolManager");
    _;
}

function beforeSwap(
    address sender,
    PoolKey calldata key,
    IPoolManager.SwapParams calldata params,
    bytes calldata hookData
) external override onlyPoolManager returns (bytes4, BeforeSwapDelta, uint24) {
    // Safe to proceed
}

Why This Matters

Without this check:

• Anyone can call hook functions directly
• Attackers can manipulate hook state
• Funds can be drained through fake callbacks

Router Verification Patterns

The sender parameter is the router, not the end user. For hooks that need user identity:

Allowlisting Pattern

mapping(address => bool) public allowedRouters;

function beforeSwap(
    address sender,  // This is the router
    PoolKey calldata key,
    IPoolManager.SwapParams calldata params,
    bytes calldata hookData
) external override onlyPoolManager returns (bytes4, BeforeSwapDelta, uint24) {
    require(allowedRouters[sender], "Router not allowed");
    // Proceed with swap
}

User Identity via hookData

function beforeSwap(
    address sender,
    PoolKey calldata key,
    IPoolManager.SwapParams calldata params,
    bytes calldata hookData
) external override onlyPoolManager returns (bytes4, BeforeSwapDelta, uint24) {
    // Decode user address from hookData (router must include it)
    address user = abi.decode(hookData, (address));
    // CAUTION: Router must be trusted to provide accurate user
}

msg.sender Trap

// WRONG - msg.sender is always PoolManager in hooks
function beforeSwap(...) external {
    require(msg.sender == someUser); // Always fails or wrong
}

// CORRECT - Use sender parameter
function beforeSwap(address sender, ...) external {
    require(allowedRouters[sender], "Invalid router");
}

Token Handling Hazards

Not all tokens behave like standard ERC-20s: