YieldSpace

How it works

A zero-coupon claim is worth less than the thing it pays out, by exactly the interest between now and maturity, and that discount shrinks to nothing as maturity arrives. Quote it on a constant-product curve and the curve does not know that. It prices the claim as a permanently distinct asset, so the pool's own convergence to par is something arbitrageurs have to impose on it, trade by trade, and the liquidity provider pays for every one of those trades.

YieldSpace, from the Yield protocol's 2019 paper, is the curve that knows. It holds x^(1 - t) + y^(1 - t) = k where `t` is the time to maturity as a fraction of a year. Far from maturity `t` is large, the exponent is small, and the curve is steep: a big discount, and the pool quotes a rate.

As maturity approaches `t` goes to zero, the exponent goes to one, and the invariant becomes `x + y = k`, a constant-sum pool that trades one for one. The convergence is the curve, not an arbitrage opportunity, so nobody has to be paid to enforce it. The consequence for the provider is the whole point.

On a constant-product pool, holding a maturing claim means being run over as it converges. Here the pool moves with it, so what the provider earns is fees on rate trading rather than a slow bleed to whoever noticed the calendar. `currency0` is the underlying and `currency1` is the claim on it.

The pool's implied rate is published by {impliedRate}, in ray per year, which is the number this market is actually about.

Using it

Uniswap v4 removed hookData from initialize, so per-pool parameters arrive out of band. Fix them for a pool key whose pool does not exist yet, then initialize. Nobody can change them afterwards, including you.

poolManager.initialize(key, startingSqrtPriceX96);

Parameters

This hook takes no per-pool configuration.

From TypeScript

npm i @hookforge/sdk

import {getHook, hookAddress, poolKeyFor} from "@hookforge/sdk";

const hook = getHook("yield-space");
const key  = poolKeyFor({
  hook: hookAddress("yield-space", 8453),   // Base
  currencyA: USDC, currencyB: WETH,
  tickSpacing: 60,
});

What it reverts with

The callbacks it claims

Uniswap v4 reads a hook's permissions from the low fourteen bits of its own address, which is why deploying one means mining a CREATE2 salt. This hook claims 0, so every deployment of it has an address ending in 0x0.

• beforeInitialize
• afterInitialize
• beforeAddLiquidity
• afterAddLiquidity
• beforeRemoveLiquidity
• afterRemoveLiquidity
• beforeSwap
• afterSwap
• beforeDonate
• afterDonate
• beforeSwapReturnsDelta
• afterSwapReturnsDelta
• afterAddLiquidityReturnsDelta
• afterRemoveLiquidityReturnsDelta

It says what it is, on-chain

Nothing about a hook's address tells an indexer, a wallet, a router or an agent what the pool does, which is why hook discovery today is a curated list. This hook answers for itself, in one eth_call, with no registry in the loop.

cast call $HOOK "hookName()(string)"    # YieldSpace
cast call $HOOK "specURI()(string)"     # https://yield-space.pages.dev/hook.json
cast call $HOOK "hookTags()(string[])"  # curve, custom-curve, fixed-rate, maturity, rates

Build, test and deploy

git clone --recurse-submodules https://github.com/nirholas/yield-space
cd yield-space
forge build && forge test

# Dry run: mines the salt, prints the address, sends nothing.
forge script script/Deploy.s.sol --rpc-url $RPC_URL

# For real.
forge script script/Deploy.s.sol --rpc-url $RPC_URL --broadcast --verify