⚠️ WARNING: This code has not yet been audited. Use at your own risk.
The Uniswap v4 hook is a replicated portfolio of an european-style, "zero-cost" collar for FX pairs (e.g. EUROC/USDC). This enables SMEs to hedge their FX risk with a low cost alternative that is non-custodial and doesn't require a sophisticated market maker as a counterparty.
Hedgers buy a FX collar by providing a desired notional amount of EUROC and USDC into Puffin as well as set the cap and the floor for which the exchange rate should stay. Lastly hedgers can opt for an expiry to meet their specific needs (e.g. geopolitical event). Unlike traditional FX collars, there is no need for a direct counterparty. Instead the expected returns of a FX collar are provided from fees on spot volume for the EUROC/USDC pair on Uniswap. You can think of fees on swaps as the premium paid by the option buyers who enjoy the right but not obligation to exercise the provided option if it is in the money. Puffin deploys a collar instance for each pair. While each collar can handle any two arbitrary ERC-20 tokens but has its premium optimized for FX pairs.
The smart contract suite is inspired by Primitive's open source RMM and the replicating market makers paper that first proved the replicated portfolio of any option strategy can be constructed using AMMs.
forge install
git submodule update --init --recursiveTODO: Add Deployed Addresses