# DutchClearingLaunch

> A descending-price launch enforced as a floor on what the pool will sell at, so a token opens at the price the first real buyer is willing to pay rather than the price the deployer guessed.

A production Uniswap v4 hook. Source: https://github.com/nirholas/dutch-clearing-launch. Part of the HookForge catalogue: https://hookforge.pages.dev

## How it works
A launch has to answer a question nobody can answer in advance: what is this worth. Fixed-price launches answer it by guessing, and are wrong in one of two expensive directions. Guess low and the entire mispricing is captured in the first block by whoever pays the most gas, which is the mechanism people call a snipe. Guess high and nothing trades until the price falls, except that in an AMM the price only falls when somebody sells, so the first honest buyer eats the whole descent. A Dutch auction answers it by asking. Start above any plausible value and come down until somebody accepts; the clearing price is then discovered rather than declared, and the first buyer pays roughly what the marginal buyer thinks it is worth instead of a number in a config file. The published way to put a Dutch auction on an AMM is a liquidity bootstrapping pool, which ramps the pool's weights so the quoted price drifts down on its own. That works and it needs a weighted pool, a weight schedule and a curve that is not the one v4 has. This does it with a constraint instead of a curve. The pool is an ordinary v4 pool. The hook computes a floor price that decays from `startPriceX96` to `floorPriceX96` over `duration`, and rejects any swap that buys the launched token below it. Nothing forces the price down; the schedule simply refuses to sell cheaply yet. When a buyer accepts, the pool's own price moves above the floor and the constraint stops binding, which is the auction clearing. When the schedule expires it stops binding forever and the pool is a normal pool. Three properties fall out of doing it this way. Sniping the first block is pointless, because the first block's floor is the start price and there is no discount to capture. Selling is never restricted, at any point in the schedule, so nobody can be trapped in a position by the launch mechanism. And the hook holds nothing, mints nothing and has no privileged role: it can refuse a swap and that is the whole of its power. The decay is linear in time. A geometric schedule is the more common choice in Dutch auctions and would need either an exponential or a lookup table on-chain; linear is exact in integer arithmetic, and a launch that wants a steep early descent can express it by picking a shorter duration and a lower floor.

## Prior art
Liquidity bootstrapping pools (Balancer LBPs, and the Uni LBP and LBP Hook submissions for v4) run the descent through a weight schedule, which needs a weighted curve. Fair-launch and anti-snipe hooks address the same problem through fees or allowlists. Expressing the auction as a decaying floor price on an otherwise ordinary pool, so the curve is untouched and the constraint simply stops binding once demand arrives, is the contribution here.

## Where it does not help
It sets a floor on the execution price, so it cannot stop somebody buying at a price far above the floor: it prevents a cheap fill, not an expensive one. A launch with no buyers at any price simply runs the schedule out and becomes an ordinary pool at the floor, which is the correct outcome but not a rescue. And because the floor binds only on buys of the launched token, a pool whose currencies are the other way round must be configured with `buyIsZeroForOne` set accordingly or the constraint will guard the wrong side.

## Facts
Slug: dutch-clearing-launch
Contract: DutchClearingLaunchHook
Callbacks: afterSwap, afterInitialize
Parameters: startPriceX96 (uint160), floorPriceX96 (uint160), startTime (uint64), duration (uint32), buyIsZeroForOne (bool)
Dynamic fee required: no

## Caveats
- Unaudited.
- A deployment with status "deterministic" is a mined CREATE2 address with no code at it yet. Never present one as live.