Author: Curry, Deep Tide TechFlow
Are you still experiencing FOMO from yesterday's popular Ethereum project Slonk? Actually, there's a new narrative that has arrived:
V4 Hook.
In the past two weeks, the Hook mechanism of Uniswap V4 suddenly gained popularity, with SATO using Hook to create an on-chain bonding curve, pushing its market cap to $40 million. uPEG, relying on the viral story of Uniswap's canceled list, achieved over $30 million in two weeks. Slonks incorporated an AI model into a smart contract to mimic CryptoPunk, transacting 586 ETH in just six days.
Although the three projects have different gameplay, they all utilize the Uniswap V4 mechanism.
Now the fourth one has arrived.
The new project is called $UORE, which just launched yesterday, summarizing its purpose in one sentence: it packs on-chain mining, lottery buying of coins, automatic generation of pixel NFTs, and deflationary burn mechanisms all into one Uniswap V4 trading pool.
Moreover, when you buy a coin in this pool, the contract simultaneously completes the six tasks mentioned above in the background, so the Gas for a transaction is two to three times that of a regular swap...
Currently, if you check CT, you'll find everyone complaining about the high Gas fees.
Regarding tokens, as of the time of writing, GMGN's data shows that only a few hours after launching, the market cap of $UORE peaked at $1.2 million, then quickly fell back to $440,000. The liquidity in the pool is only $64,000, yet the 24-hour trading volume is $1.2 million, indicating that the money in the pool has rolled over nearly twenty times.
However, there are only 741 holders, with a total supply of less than 10,000 coins.
Currently, the risk seems extremely high. After some simple research, I personally feel that it is the most complex project in the V4 Hook ecosystem (the new on-chain gameplay in this round tends to make the mechanisms difficult to understand...).
It is simultaneously a token, an NFT collectible, a staking mining pool, and a lottery system. Moreover, these four elements are not independent; they are welded together.
Four-in-One Mining Pool
In most NFT projects, tokens and NFTs are separate, bought and sold independently.
UORE is not. Its NFT is called Oreling, a 32×32 pixel miner figure, directly embedded within the token. For each integer UORE you hold in your wallet, it automatically corresponds to one Oreling.
When buying coins, the contract helps you mint; when selling, the contract helps you burn; during transfers, the Oreling goes along. You cannot buy an Oreling separately, nor can you dismantle it from UORE.
Each Oreling's characteristics are determined by the hash value of the next block at the moment of minting. This means you don’t know what kind of figure you will get when you buy; even the validators cannot see the results in advance.
The differences between these figures are not just about aesthetics.
Each Oreling has a Class (rarity) and a Hash (a random number from 1 to 100), and multiplying the two gives its Mining Power, which is the mining ability.
The most common Mortal accounts for 60%, with a power multiplier of 1; the rarest God has only a 1% chance, with a multiplier of 5. If you're lucky enough to draw a God with Hash 100, its power is 500, which is more than ten times that of a regular miner.
So what is the use of Mining Power? The old gameplay: staking.
By staking Oreling in the mining pool, you start to receive daily UORE releases based on your power share. According to the official whitepaper, 1,000 UORE will be released on the first day, with a 1% decline each day, resulting in a half-life of approximately 69 days. 80% of the released amount is distributed to stakers, and 20% goes into the Motherlode prize pool.
This decay rate means that within a year, 97% of the total issuance will be released. The earlier you start mining, the larger your share of the pie.
When claiming rewards, there is a design worth noting: a 10% "refinement tax" is deducted and redistributed to all stakers who haven't claimed yet. The whitepaper calls this refined-ore boost.
In plain terms, the later you claim, the more you benefit from other people's taxes. Those in a rush to collect their money are subsidizing the patient ones.
Next is Motherlode, translated as "Mineral Prize".
Every time you buy ≥ 0.1 ETH of UORE through official channels, you automatically receive a lottery ticket. The winning probability is linked to the purchase amount: approximately one in six for 0.1 ETH, one in two hundred for 0.5 ETH, and one in one hundred for 1 ETH. The probability does not increase for purchases over 1 ETH to prevent large holders from skewing odds.
If you win, the prize pool splits into two: 50% goes directly to the buyer, and 50% is randomly distributed to a staker (weighted by power). As of writing, there have been only four wins historically, with the largest being 6.4 UORE.
Lastly, there is the deflationary flywheel.
Buying incurs a 1% tax that is directly burned, while selling incurs a 1% tax that goes into the buyback treasury. When the treasury accumulates to 0.1 ETH, anyone can trigger an automatic buyback, with all bought UORE being burned. As of writing, 58 buybacks have been executed, with a total of 358 UORE burned.
Looking at the overall design, it combines small innovations in gameplay, creates scarcity through old methods, and is yet another Ponzi-like economic model design.
The project code is a fork, the gameplay is a patchwork
UORE was not created from scratch.
Someone in the community examined the source code and found a folder in the code directory called reference/unipeg-hook-source/. The founder Noah did not hide this; he directly stated on Twitter that UORE's contract forked uPEG and fixed two known issues from uPEG: NFT duplication and flash loan rarity attacks.
Checking this founder's account, the personal bio reads "Ethereum dev & BAYC holder." On May 2, he posted the first tweet about UORE, stating that this project combines the mining idea of ORE on Solana with the V4 Hook architecture of uPEG.
He also proactively @ed Unicurvefun and Openpeg, asking if support for Oreling trading could be added after their market launches.
From the information available, the lineage of the UORE project is clear:
Solana ORE provided the "on-chain mining + lottery" gameplay template, uPEG provided the code framework for V4 Hook, and Noah improved and assembled it based on these two foundations.
Forking itself is not the problem. I think the current issues are:
- Gas. There are reports on CT that each UORE transaction requires six steps to be completed in the Hook, with Gas consumption being two to three times that of a regular swap. A few hops could lead to much less profit remaining.
- Time window. The V4 Hook narrative is affected by the decline of uPEG, and the upper limit of subsequent projects will become lower. UORE is the fourth project in this Hook craze, and the heat of the previous three has already cooled. The attention window in this race waits for no one.
- Complexity. UORE might be the one with the most mechanisms among these four projects. A regular user must understand the whole set of rules regarding Oreling rarity, power calculation, staking decay, refinement tax, Motherlode probability, and buyback trigger conditions, which is no small task, and the website presents it like a riddle.
Moreover, the project whitepaper is quite interesting:
Read the contracts and understand the mechanics before deploying capital.
This sentence roughly translates to "Understand it first or don't blame me later."
By combining this with the previous Hook projects, we can observe that this wave of on-chain market activity involves complex mechanism designs and significant information asymmetry, harboring alpha potential, but the shelf life of that alpha is getting shorter.
SATO gave it a week, uPEG gave it a few days, and for UORE, you might only have a few hours left to understand the rules...
By the time you comprehend it, the market might have already unfolded.
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