# BlockBatchClearing

> Every swap in a block clears at one price, and orders that want opposite sides fill against each other for free.

A production Uniswap v4 hook. Source: https://github.com/nirholas/block-batch-clearing. Part of the HookForge catalogue: https://hookforge.pages.dev

## How it works
Almost all of what is called MEV is the value of being first. A continuous market prices each order at the state the one before it left behind, so the right to arrive earlier is worth money, and that right is sold. Batch auctions were proposed for exactly this in the equities literature, and the answer they give is not to police the ordering but to abolish it: collect every order in an interval and clear them all at one uniform price. Being first in a batch is worth nothing, because there is no first. CoW Protocol runs that design with a network of solvers off-chain. Doing it on-chain has needed a solver too, since a uniform price for a batch against a bonded curve looks like a fixed point: the price depends on the net trade, and the net trade depends on the price. For a constant-product pool it is not a fixed point. Requiring that both sides clear at one price `p` and that the invariant hold gives a quadratic in `p` with an exact solution, and this hook solves it in closed form. There is no solver, no auction, no bond and nobody to trust with the ordering. What falls out of it is the part traders will notice. Orders in opposite directions settle against each other before the curve is touched at all, so matched flow pays no slippage whatsoever; only the imbalance moves the price. A block where buyers and sellers are evenly matched clears at the spot price for everybody, which is a thing a continuous AMM cannot do at any size. The cost is that a swap does not return tokens. It returns a claim on a batch that has not cleared yet, and the trader collects afterwards. That is the honest price of not having an ordering to sell.

## Prior art
Frequent batch auctions are Budish, Cramton and Shim's answer to the equities latency race. CoW Protocol clears uniform-price batches with off-chain solvers, and Gnosis ran an on-chain batch exchange over an order book. On v4, TWAMM spreads one order over time and various hooks reorder or tax within a block. Clearing a whole block's flow against a bonded curve at one uniform price, solved in closed form on-chain with no solver and no auction, is the contribution here.

## Where it does not help
A swap returns nothing at the moment it is made, so this cannot be routed through by an aggregator expecting tokens back and is unusable for anything atomic. Orders are exact-input only, for the same reason an exact output cannot be promised before the price is known. A batch also clears when somebody touches the pool in a later block, so the last batch of a quiet period waits for the next swap or for anybody to call `clear`; the trader's funds are held meanwhile. And the uniform price is uniform within a block, which means the ordering advantage is gone but the choice of which block to be in is not.

## Facts
Slug: block-batch-clearing
Contract: BlockBatchClearingHook
Callbacks: beforeSwapReturnsDelta, beforeSwap, beforeRemoveLiquidity, beforeAddLiquidity, beforeInitialize
Parameters: none
Dynamic fee required: no

## Caveats
- Unaudited.
- A deployment with status "deterministic" is a mined CREATE2 address with no code at it yet. Never present one as live.