Introducing KYC Hook, can Uniswap with KYC still be considered DeFi?

Original author:Jaleel，BlockBeats

Uniswap announced the V4 version four months ago. As one of the innovative features of V4, hooks can execute the logic of external smart contracts at different key points in the pool, making the same trade-offs as v3, or can add completely new features.

On October 10, Uniswap founder Hayden (@haydenzadams) forwarded a community content on social media, saying: Only a few months since the release of v4, there is already a hooks directory site and 75 community-built Different hooks. As an expressive native feature, hooks win in public construction.”

It is worth noting that KYC Hooks were launched by community developers in the directory of Uniswap V4. As one of the optional features, KYC verification will be performed by NFT, which caused great discussion in the community.

Why is building a permissioned system on top of a permissionless protocol controversial?

Crypto KOL Adam Cochran (@adamscochran) directly points out that this is a classic case of boiling frogs: “If you create tools for permissioned systems, you are giving regulators a reason to push for their use, even in contexts where it is not necessary. For example, if Uniswap Assets on the front end can be forced to review, which is legally ambiguous, but when legislators ask for it, they do so without hesitation. If you are building a permissioned system on top of a permissionless protocol, you must ensure that: They are different For permissionless tools; they are necessary and not better for databases; you do not open the permissionless layer to additional enforcement attacks by state actors.

“This is my criticism of Uniswap’s (angry) attacks on these aspects. It doesn’t matter whether they intend to build a KYC pool. What matters is that they have opened a Pandora’s box and have a mixed record of resisting regulators. Owned This kind of flexible tool is great, but we also need a large-scale ironclad system that neither has it nor can have it nor is it susceptible to coercion or coercion. Adam continued: This is something I hope Im wrong about. case, but we should never stop pushing for hardened uncensorable systems.

Some communities pointed out that as Uniswap may introduce the KYC Hooks function, it makes us rethink what real DeFi is. Can Uniswap with KYC still be considered DeFi?

In this regard, Haotian (@tme l0 211) expressed a different view: Uniswap V4 has built an open and permissionless hooks market. Anyone can build hooks to be incorporated into the execution process of the entire transaction. Based on this premise, of course, There may be hooks with decentralized thinking like kyc and whitelist, but this does not mean that every transaction processed by Uniswap V4 must go through kyc. This is exactly the spirit that an open, free and trustless DeFi market should promote and encourage. How can we be treated as if we are crying wolf and DeFi is going to die?

There is also the same view that the people criticizing Uniswap are rarely the builders, they are more like people on the back of the chair, just foaming at the mouth for the liquidity extraction event.

As time goes on, the introduction of KYC on DEXs will only become more common - having this split between the agency feds who want to comply and the proxy feds who dont is a good thing. Ultimately, the definition and boundaries of DeFi may also continue to change based on market and community needs.