What is Covenant?
Covenant is a market primitive built as a Uniswap v4 hook. It sits inside the swap flow of a single CVN/ETH pool and rewrites the economics of exiting.
Instead of letting a sell drain the pool, the hook splits it: most executes normally, but a fixed slice is retained as a covenant — a temporary, on-chain obligation with a price and an expiry. Buyers can take that obligation on at a discount. Whatever nobody absorbs turns into permanent liquidity.
Three guarantees
Covenant is designed to be safe to build on — "boring by design". Three properties make that true:
| Guarantee | What it means |
|---|---|
| Non-custodial | Covenants are enforced by smart contracts. No multisig, no admin keys, no protocol-side discretion over user funds. |
| 7-day expiry | Unabsorbed exit debt becomes locked liquidity on a fixed, predictable schedule — for sellers and buyers alike. |
| Buyer discount | Buyers absorb covenant debt below market. Sell pressure is rerouted into accretive demand instead of price decay. |
What it is not
Covenant is not a bonding curve, a reflection/tax token, a burn mechanism, or a yield product. It does not promise price stability, dump protection, guaranteed yield, or guaranteed absorption. It is a market-structure hook: it changes what a sell becomes, and then lets the market decide.
The pieces
- CVN — the token. The pool is CVN/ETH on Uniswap v4.
- The hook — detects buys and sells, applies the tax, creates and absorbs covenants, and settles expiries. This is the brain.
- The covenant queue — a FIFO list of open covenants, and the single on-chain address you index to see protocol state.
- The creator — an immutable address that receives the 3% ETH tax and seeds the pool.
Read on for the problem Covenant solves, or jump straight to how the mechanism works.