The CoW Protocol, a DEX and AMM aggregation protocol that pools liquidity from multiple exchanges to guarantee users the lowest prices between trading pairs, just announced the release of CoW Hooks.
Hooks are code outlets in smart contracts that allow for custom injections. Developers can customize smart contract code functions through hooks to execute specific and predetermined tasks during a swap, drastically elevating trade complexity.
Hooks execute directly before or after a swap to perform on-chain actions such as staking, bridging, and depositing.
Cow Hooks Explained
The Cow Protocol contends that “CoW Hooks are arbitrary Ethereum “calls” that attach to an order and execute before and/or after the order.” Pre-hooks are used to execute an action directly before a swap, and post-hooks are used when performing a specific action post-swap.
Pre-hooks are used to set up conditions for an order, such as validating an on-chain transaction signature. Post-hook actions are executed post-swap once the receiver of the transaction condoms the funds have been sent to their wallet—post-hook actions allow a window of time for the sent funds to be immediately staked.
CoW Hook Use Cases
CoW Hooks empower users to define pre and post-hook intents and swap intents. The custom actions that can be performed through CoW Hook executions are limitless. CoW Hooks carry real-world utility and Web2 integration capabilities as they can be used to repay debt or mortgage collateral levels.
A use case for CoW Hooks is enabling complex trade capabilities, including opening Liquidity Provider trading positions for higher yield on ERC-20 token swaps. In this use case, a post-hook action would allocate a portion of the trade value to a liquidity pool to be staked on the network, earning the user a yield on the staked value over time.
Other use cases for CoW Hooks include:
- Bridging to other chains
- Claiming airdrops
- Unstaking and staking token values
- NFT snipping and selling
- Customizing trade orders (such as setting limit orders and stop loss orders)
Conclusion
CoW Protocol is a crazy DeFi project that is extremely multifaceted in its provided solutions. Now, with the implementation of CoW Hooks, the CoW Swap enables highly customizable trading experiences for users looking for complex swap capabilities.
