# Grant Update: Bringing Policy Infrastructure Onchain with the Predicate Institutional Hook 

By [Uniswap Foundation](https://paragraph.com/@uniswap-foundation) · 2025-06-18

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_Developed with support from the Uniswap Foundation, the_ [_Predicate Institutional Hook_](https://predicate.io/blog/risk-management-framework-for-institutional-liquidity-on-uniswap-v4) _enables regulated financial institutions to deploy compliant liquidity pools on Uniswap v4 through programmable policy enforcement._

To unlock institutional participation in DeFi, the Uniswap Foundation has committed a $325,000 grant to [Predicate](https://predicate.io/) and [Paxos](https://www.paxos.com/) to develop a new policy enforcement framework for Uniswap v4. This framework, powered by the Predicate Institutional Hook, allows regulated financial institutions to deploy compliant liquidity pools through programmable, onchain policy enforcement.

### **Embedding programmable policies directly into Uniswap pools**

Moving institutional capital onchain requires meeting legal, regulatory, and operational requirements that permissionless protocols don’t natively support. A key blocker has been the absence of protocol-level risk controls.

The Predicate Institutional Hook addresses this gap, embedding programmable policies directly into Uniswap Protocol pools. This allows institutions to meet regulatory requirements while accessing onchain liquidity.

> “Policy is going to be critical infrastructure to power the rails for regulated capital to come onchain. We believe blockchains will be the global financial settlement system - and to enable that, regulated and unregulated markets need to coexist on the same platforms.”  
>   
> \- [Khushi Wadhwa](https://x.com/khushii_w), Head of Research and Strategy at Predicate

### **Predicate Institutional Hook: Key Features**

The Predicate Institutional Hook translates offchain compliance requirements into enforceable onchain rules. Institutions can define and manage policies around liquidity provisioning, swapping, and broader onchain behavior.

Features:

*   **Policy Enforcement**: Smart contract-level rule execution verified by distributed operators
    
*   **Liquidity Management**: Controls for who can supply liquidity to prevent fund commingling
    
*   **Swap Controls**: Flow-of-funds verification, identity checks, and transaction limits
    
*   **Regulatory Compliance**: Support for AML/CFT, sanctions screening, and geolocation restrictions
    
*   **Extensibility**: Programmable policies using onchain and offchain data sources
    

### **Case Study: Paxos Lift Dollar Implementation**

Paxos International has deployed the first production use of the Predicate Institutional Hook to support its yield-bearing stablecoin, Lift Dollar (USDL). The integration combines:

*   **Predicate Institutional Hook**: For AML/CFT and geolocation compliance
    
*   **Auto-Wrapping Hook**: To handle USDL’s rebasing mechanism
    

Together, these hooks create a dual-layer architecture: a “ghost” pool interface for USDL swaps, and a “liquid” pool for actual wUSDL/USDC trading—delivering a seamless user experience while maintaining full compliance. [Learn more.](https://predicate.io/blog/risk-management-framework-for-institutional-liquidity-on-uniswap-v4)

### **Get Involved**

The Predicate Institutional Hook framework is now available for regulated institutions looking to deploy compliant liquidity on Uniswap v4.

*   For implementation support and policy configuration, contact the [Predicate](https://predicate.io/) team.
    
*   Documentation and integration guides are available for institutions with compliance concerns looking to come onchain

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*Originally published on [Uniswap Foundation](https://paragraph.com/@uniswap-foundation/grant-update-bringing-policy-infrastructure-onchain-with-the-predicate-institutional-hook)*