voting-hook

A Uniswap V4 Hook that allows LP holders to vote with their underlying tokens

Developed by:

devtooligan and wildmolasses

Uniswap Hook Incubator Cohort #3

Liquidity providers in DeFi face a common dilemma: they must choose between earning fees by providing liquidity or participating in governance. When tokens are locked in a liquidity pool, LPs lose their ability to vote with those tokens. Our hook solves this problem by enabling LP token holders to participate in governance using their underlying token position.

When users provide liquidity to a Uniswap pool their governance tokens get locked in the pool so they must choose between earning fees or participating in governance

The voting-hook:

1. Tracks underlying token amounts through price and liquidity checkpoints
2. Calculates governance token ownership at any block number
3. Integrates with governance systems while tokens remain in the pool

The voting-hook system consists of three main components that work together to enable LP governance participation:

1. TokenBalancesTrackerHook

   • Core Uniswap v4 Hook that users' underlying token balances in LP positions
   • Uses OpenZeppelin's Checkpoints to maintain secure history of:
     • Position liquidity
     • Pool prices
     • Position tick ranges
   • Retrieves balances at any historical block

2. WrapRouter

   • Simple router that wraps/unwraps tokens for pool interactions
   • Pool holds wrapped tokens while router custodies the underlying tokens
   • There are many use cases for this type of router:
     • Lending out underlying tokens for yield
     • Solves certain security vulnerabilities for example tokens with a blacklist can prevent flashloaning of their tokens to meet regulatory guidelines

3. Flexible Voting Integration

   • WrapRouter extends FlexVotingClient
   • Flexible Voting is a powerful governance primitive developed by Scopelift:
     • Allows splitting voting weight across For/Against/Abstain
     • Integrated into OpenZeppelin's Governor contracts
     • Adopted by major DAOs like Aave, Gitcoin, and Frax
   • Enables LP governance participation while:
     • Maintaining liquidity position
     • Earning trading fees
     • Potentially earning additional yield

• WrapRouter is currently a simple implementation based on the utilities used by Uniswap test framework. We want to build out a full-fledged router.
• Build a simple UI that would allow holders of these LP tokens to cast votes on their underlying tokens