Uniswap v4 hook that is resistant to atomic sandwich attacks.
To install with Foundry:
forge install cairoeth/sandwich-resistant-hookThis hook implements the sandwich-resistant AMM design introduced in A Sandwich Resistant AMM. Specifically, this hook guarantees that no swaps get filled at a price better than the price at the beginning of the slot window (i.e. one block):
Within a slot window, swaps impact the pool asymmetrically for buys and sells. When a buy order is executed, the offer on the pool increases in accordance with the xy=k curve. However, the bid price remains constant, instead increasing the amount of liquidity on the bid. Subsequent sells eat into this liquidity, while decreasing the offer price according to xy=k.
In addition to the points noted in the Considerations section of the article, it's worth noting that swaps in the other direction do not get the positive price difference compared to the initial price before the first block swap.
Hook.mp4
The design is implemented with dynamic fees, which allows the hook to increase the net spread or fee swappers pay to the liquidity providers. In order to be able to calculate the fee across ticks and reset the state after each slot window, the hook tracks the base pool state, and a temporary pool state. Before executing the first swap in a slot window, the hook checkpoints the initial slot0 from the base pool, which contains the current price, tick, protocol fee, and lp fee. Then, after executing the first swap on the base pool state, the hook initializes the temporary pool state as a copy of the base pool state. Subsequent swaps in the same slot window execute the swap on both the base and temporary pool states, but the fee is applied to increase the net spread in the delta from the base pool state. Depending on the swap direction, the hook applies the checkpointed slot0 to the temporary pool state to ensure that the bid price remains constant and that liquidity on the bid tick increases as buy orders are executed. In the first swap of the next slot window, the hook checkpoints the new slot0 from the base pool state, executes the swap on the base pool state, and re-initializes the temporary pool state.
This repository is inspired by or directly modified from many sources, primarily: