> For the complete documentation index, see [llms.txt](https://docs.toggle.money/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.toggle.money/how-it-works-technical.md).

# How It Works (Technical)

Toggle is an operator of Uniswap v4 **DualPool**. One DualPool hook serves many pools. Each pool is a memecoin / USDG pair (or USDG / WETH, TOGGLE, and so on).

The hook is Uniswap’s audited DualPool bytecode, deployed through the AllowlistedFactory. Toggle does not modify swap math.

## Pool Shape

Each pool is a Uniswap v4 pool with DualPool attached.

At `initializePool`:

* **Fee** is static (set once, for example 0.30%). No dynamic fee.
* **Vaults** are bound once. USDG → Morpho ERC-4626 (Steakhouse USDG or another feeless vault whose `asset()` is USDG). Meme → `address(0)` (raw ERC-20).
* **Distribution** is 1–8 weighted tick buckets (weights sum to 10,000 bps). This is concentrated liquidity, not a Uniswap v2 pair.
* **External deposits** can be opened so anyone can LP.

`bootstrap` seeds inventory, mints shares, and sets the pool live. Swaps before bootstrap revert.

{% hint style="warning" %}
Native ETH is not supported. Use WETH. Fee-on-transfer and rebasing memes are not supported (`TransferReceiptShortfall` on deposit).
{% endhint %}

## Rest vs Work

Between swaps the PoolManager holds effectively **zero** liquidity.

| Leg      | Resting Place                                             |
| -------- | --------------------------------------------------------- |
| USDG     | ERC-4626 (`vault.deposit` / vault shares)                 |
| Memecoin | ERC-20 on the hook, or ERC-6909 claims in the PoolManager |

A 4626 is required for any vaulted leg. DualPool’s type is `IERC4626`. The alternative is `address(0)` (no yield). A Morpho Blue **market** is not a vault. Only a feeless 4626 whose `asset()` matches the currency can be bound.

Feeless check at init:

* `previewDeposit(x) == convertToShares(x)`
* `previewRedeem(x) == convertToAssets(x)`

{% hint style="danger" %}
Entry or exit fees fail init. Looping adapters that slip on unwind will fail this check or break JIT accounting. Toggle uses a lending vault, not a leverage loop, on the DualPool path.
{% endhint %}

## JIT Cycle (One Swap Transaction)

```mermaid
sequenceDiagram
    participant Trader
    participant DualPool
    participant Morpho
    participant PM as PoolManager
    Trader->>DualPool: swap
    DualPool->>Morpho: withdraw USDG shortfall
    DualPool->>PM: deploy tick buckets
    PM->>PM: v4 swap + fee
    DualPool->>PM: remove liquidity
    DualPool->>Morpho: deposit leftover USDG
```

**beforeSwap**

1. JIT lock (blocks reentrant LP / distribution changes).
2. Size each bucket from current balances and weights.
3. Compute token amounts via `SqrtPriceMath`.
4. Redeem claims; `withdraw` only the USDG shortfall from the vault.
5. Deploy each bucket as a DualPool LP position (`LP_SALT`).

PoolManager then executes a normal v4 swap against those positions and charges `PoolKey.fee`.

**afterSwap**

1. Remove the temporary positions.
2. Settle deltas with the PoolManager.
3. `deposit` remaining USDG back into the vault.
4. Clear the JIT lock.

No keeper. The swap pays for the round trip. Gas is higher than a vanilla v4 swap because vault I/O lives in the same transaction.

## Accounting

Shares are DualPool internal shares (non-transferable), v2-style `sqrt(amount0 * amount1)` on bootstrap, with virtual-offset inflation defense. LPs own a slice of total assets: vault shares + claims + ERC-20 on the hook.

Operator controls (outside the three invariants of fee, vault binding, and swap math):

* `setDistribution` — reshape tick buckets between swaps
* `setPoolLive` — pause / resume
* `setExternalDeposits`
* `emergencyRevokeVault` — pause, kill deposits, zero vault allowances, try to pull assets out

## Quoting

On-chain pool state between swaps shows a price and almost no liquidity. Routers that read depth only will skip Toggle.

DualPool exposes a quoting surface: an indicative quote against the liquidity the hook **would** deploy, plus total assets vs effective liquidity (what the vault can return right now if capped). Aggregators should quote that surface. A paused pool reverts with a distinct error.

## Protocol Take

Swap fees and harvest are split on-chain. LPs keep the majority. The protocol share buys TOGGLE on the market. See [Tokenomics](/tokenomics.md).

## What Toggle Adds

Uniswap DualPool is the engine. Toggle is the memecoin DualPool operator: factory and registry of meme / USDG pools, Morpho USDG vault binding, quoting for aggregators, and the TOGGLE buyback path.


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