The SOCKET token

SOCKET holders decide which hooks Socket's app routes trades through and how much of the LP fees in new pools on Socket's hooks goes to buying SOCKET back and burning it. Hook authors stake SOCKET to keep their hooks on the list.

The token#

Fair launch#

All 1,000,000,000 SOCKET go into one public launch, on the same terms for everyone. Nothing is set aside before it:

• no presale and no private round,
• no team or contributor allocation,
• no airdrop or early-user allocation,
• no treasury or reward pool,
• no vesting, because there is nothing to vest.

Socket's contributors hold SOCKET only if they buy it, like anyone else.

Voting#

Holders vote with SOCKET deposited in SocketGovernor: one deposited SOCKET is one vote. A vote counts what you had deposited when it opened, and a deposit can be withdrawn at any time. Deposits, votes and proposals all run from the app's Govern page; see Vote with SOCKET.

1. Propose

   Anyone with 1,000,000 SOCKET deposited (0.1% of the supply) can open a proposal. A proposal carries the exact change it makes: a hook to list or remove, a removed hook's stake to burn, or a new buyback share.

2. Vote

   Voting stays open for five days. A proposal passes when its yes votes outnumber its no votes and reach 3% of SOCKET's supply. Burns lower the supply, and the 3% follows it.

3. Execute

   A passed proposal waits two days in the timelock, then executes as written. Anyone can trigger the execution.

What SOCKET decides#

The hook allowlist#

Uniswap v4 lets any pool name any hook. Socket's app quotes and routes trades only through pools with no hook or with a hook on the allowlist, so the allowlist decides which hooks Socket users trade through. It lives in HookRegistry, and any contract can check a hook with isListed(address hook).

Socket's built-in hooks are on it from the start. Every other hook is there because SOCKET holders voted it on, and the app shows it as External hook. A hook's author proposes it with:

• its verified source on the explorer,
• its address and flags,
• whoever can change it (an owner, a proxy admin), if anyone,
• an independent review.

Holders vote it on, and can vote it off.

Listing stakes#

A hook on the allowlist is backed by its author. Proposing a hook locks 1,000,000 SOCKET from the author in HookRegistry for as long as the hook stays listed.

• Listed: the stake stays locked.
• Removed, or the proposal fails: the author can withdraw the stake seven days after the hook was proposed or removed.
• Removed because the deployed code doesn't match its published source: the removal vote can burn the stake instead, and a later vote can burn a removed hook's stake while it is still locked. Burned SOCKET leaves the supply for good.

The stake is the author's own SOCKET: what the author puts behind the claim that the hook does what its source says.

The buyback#

A pool on one of Socket's built-in hooks keeps a buyback share of the LP fees its positions collect: 20% today. Any change of a position collects its fees. In that call, the hook takes the share of feesAccrued and sends it to the Buyback contract. Swaps and quotes are untouched: swappers pay the pool's fee, and LPs collect the rest of it.

The Buyback turns that share into SOCKET and burns it. Anyone can run it:

1. It swaps what it holds toward SOCKET, through pools with no hook or a listed hook. It goes through ETH or USDG first when a token has no SOCKET pool.
2. One run moves a pool's price by at most 0.25%.
3. Each input token runs at most once every ten minutes.
4. It burns all the SOCKET it holds.

No key holds the fees on the way: the Buyback can only swap toward SOCKET and burn it. Burned SOCKET leaves the supply for good. The app's Govern page shows the buyback and how much it has burned.

Pools on External hooks, and pools with no hook, keep no buyback share. A vote can set the share that pools initialized afterwards keep, anywhere from 0% to 50%. Each pool keeps the share it was initialized with.

What a vote can't change#

Governance acts on the allowlist, the stakes behind it, and the buyback share of pools initialized after a vote. No vote can change an existing pool's tokens, fee, hook, settings or buyback share, move tokens out of PoolManager or anyone's position, or pause trading. v4 pool keys are immutable, and the buyback's share can only buy SOCKET and burn it. Those rules hold for every pool, whatever SOCKET holders decide. See Security.