A new hook available on an open-source directory for Uniswap V4 hooks is sparking controversy within the crypto community. The hook enables users to be checked for Know Your Customer (KYC) before they can trade on a pool.
Criticizing the hook, a user at X (formerly Twitter) noted that the hook opens up the possibility of decentralized finance protocols being whitelisted by regulators:
“As I explained in all my posts for the past year: It starts with “kyc option” for LPs. And then eventually it moves into a “regulator whitelist approved” database hosted offchain. And then non-kyc gets labeled as illegal terrorist money laundering. Stop simping for soyboys.”
Essentially, a hook is a tool that allows developers to customize a code without altering the main structure of the program. In Uniswap V4, this hook will permit developers to use KYC verification within the decentralized finance protocol.
Financial institutions use KYC procedures to authenticate customer identities and assess associated risks. A primary goal of KYC is to detect money laundering and terrorist financing activities.
The KYC hook was rolled out by a community developer on Uniswap V4’s directory as an opt-in functionality. The KYC…
