The fund (mechanism)
How the trading fee becomes distributions and reserves
The trading fee
The pool is Uniswap v4 and the fee is a hook attached to it, collected inside the swap before settlement, on every purchase and every sale. A token level transfer tax cannot reach v4: the PoolManager is a single contract holding every pool, with no pair address to key a tax against. The fee hook is collected by the pool itself, so no venue escapes it. The rate is fixed in the hook at 5.00% on purchases and 5.00% on sales.
The machine
Fees accrue at the hook in ETH. Once the cooldown of 8 hours has elapsed, settlement is permissionless. A settlement claims the accrued fee and divides it into two legs: 80.00% to the distribution leg and 20.00% to the treasury leg. The distribution leg purchases HOOK on the pool and delivers it to the staking contract. The treasury leg is exchanged for USDG through the ETH/USDG pool and delivered to the treasury.
A settlement purchases at most 0.2000 ETH and bridges at most 0.2000 ETH; further settlements in the same epoch work down what remains in the legs. The settler receives a bounty of 0.0020 ETH from the claim. The desk carries the settle control.
The Hookholder Distribution Program
Holders stake HOOK with the staking contract. The contract keeps one accumulator, the distribution index, which rises at each settlement by the HOOK purchased divided by the HOOK staked. A staker's claim is the stake plus what the index has credited since the stake last settled. There is no rebase and no issuance: a staked balance grows because HOOK was bought on the open market and delivered.
Stake is redeemable one for one at any time, without lockup. The minimum stake is 1 HOOK. Should a settlement occur with nothing staked, the HOOK purchased is burned and the index does not move.
Rates
Every rate the terminal reports is trailing and realised: computed from settlements that have already occurred, over a stated window, and labelled as such beside the figure. No forward or extrapolated figure is published. Future settlements are funded solely by fees the pool collects; a quiet market pays little and a silent one pays nothing.
Two machines
The machine that opened with the pool settled one purchase per epoch. A successor, deployed on 3 September 2026, claims the fee today and clears its legs in full each epoch. The first machine continues to settle the ETH it accumulated, one purchase per epoch, for the holders staked with its contract. Both appear under official channels, and reserve fund value counts both treasuries.