merge main

.forge-snapshots/addLiquidity CA fee.snap

@@ -1 +1 @@
-331831
+331641

.forge-snapshots/addLiquidity with empty hook.snap

@@ -1 +1 @@
-286606
+286634

.forge-snapshots/poolManager bytecode size.snap

@@ -1 +1 @@
-22097
+22118

.forge-snapshots/removeLiquidity CA fee.snap

@@ -1 +1 @@
-187273
+187083

.forge-snapshots/simple swap with native.snap

@@ -1 +1 @@
-117304
+117431

.forge-snapshots/simple swap.snap

@@ -1 +1 @@
-132465
+132592

.forge-snapshots/swap CA custom curve + swap noop.snap

@@ -1 +1 @@
-134799
+134711

.forge-snapshots/swap CA fee on unspecified.snap

@@ -1 +1 @@
-183793
+183730

.forge-snapshots/swap against liquidity with native token.snap

@@ -1 +1 @@
-112929
+113056

.forge-snapshots/swap against liquidity.snap

@@ -1 +1 @@
-124272
+124399

.forge-snapshots/swap burn 6909 for input.snap

@@ -1 +1 @@
-136325
+136452

.forge-snapshots/swap burn native 6909 for input.snap

@@ -1 +1 @@
-125453
+125580

.forge-snapshots/swap mint native output as 6909.snap

@@ -1 +1 @@
-147514
+147641

.forge-snapshots/swap mint output as 6909.snap

@@ -1 +1 @@
-164319
+164446

.forge-snapshots/swap skips hook call if hook is caller.snap

@@ -1 +1 @@
-223093
+223312

.forge-snapshots/swap with dynamic fee.snap

@@ -1 +1 @@
-148520
+148647

.forge-snapshots/swap with hooks.snap

@@ -1 +1 @@
-124284
+124411

.forge-snapshots/swap with lp fee and protocol fee.snap

@@ -1 +1 @@
-180775
+180884

.forge-snapshots/swap with return dynamic fee.snap

@@ -0,0 +1 @@
+156513

.forge-snapshots/update dynamic fee in before swap.snap

@@ -1 +1 @@
-159006
+159121

src/PoolManager.sol

@@ -227,19 +227,25 @@ contract PoolManager is IPoolManager, ProtocolFees, NoDelegateCall, ERC6909Claim
         PoolId id = key.toId();
         _checkPoolInitialized(id);
 
-        (int256 amountToSwap, BeforeSwapDelta beforeSwapDelta) = key.hooks.beforeSwap(key, params, hookData);
-
-        // execute swap, account protocol fees, and emit swap event
-        swapDelta = _swap(
-            id,
-            Pool.SwapParams({
-                tickSpacing: key.tickSpacing,
-                zeroForOne: params.zeroForOne,
-                amountSpecified: amountToSwap,
-                sqrtPriceLimitX96: params.sqrtPriceLimitX96
-            }),
-            params.zeroForOne ? key.currency0 : key.currency1 // input token
-        );
+        BeforeSwapDelta beforeSwapDelta;
+        {
+            int256 amountToSwap;
+            uint24 lpFeeOverride;
+            (amountToSwap, beforeSwapDelta, lpFeeOverride) = key.hooks.beforeSwap(key, params, hookData);
+
+            // execute swap, account protocol fees, and emit swap event
+            swapDelta = _swap(
+                id,
+                Pool.SwapParams({
+                    tickSpacing: key.tickSpacing,
+                    zeroForOne: params.zeroForOne,
+                    amountSpecified: amountToSwap,
+                    sqrtPriceLimitX96: params.sqrtPriceLimitX96,
+                    lpFeeOverride: lpFeeOverride
+                }),
+                params.zeroForOne ? key.currency0 : key.currency1 // input token
+            );
+        }
 
         BalanceDelta hookDelta;
         (swapDelta, hookDelta) = key.hooks.afterSwap(key, params, swapDelta, hookData, beforeSwapDelta);

src/ProtocolFees.sol

@@ -35,7 +35,7 @@ abstract contract ProtocolFees is IProtocolFees, Owned {
     /// @inheritdoc IProtocolFees
     function setProtocolFee(PoolKey memory key, uint24 newProtocolFee) external {
         if (msg.sender != address(protocolFeeController)) revert InvalidCaller();
-        if (!newProtocolFee.validate()) revert InvalidProtocolFee();
+        if (!newProtocolFee.isValidProtocolFee()) revert InvalidProtocolFee();
         PoolId id = key.toId();
         _getPool(id).setProtocolFee(newProtocolFee);
         emit ProtocolFeeUpdated(id, newProtocolFee);
@@ -77,7 +77,7 @@ abstract contract ProtocolFees is IProtocolFees, Owned {
                 returnData := mload(add(_data, 0x20))
             }
             // Ensure return data does not overflow a uint24 and that the underlying fees are within bounds.
-            (success, protocolFees) = (returnData == uint24(returnData)) && uint24(returnData).validate()
+            (success, protocolFees) = (returnData == uint24(returnData)) && uint24(returnData).isValidProtocolFee()
                 ? (true, uint24(returnData))
                 : (false, 0);
         }

src/interfaces/IHooks.sol

@@ -99,12 +99,13 @@ interface IHooks {
     /// @param hookData Arbitrary data handed into the PoolManager by the swapper to be be passed on to the hook
     /// @return bytes4 The function selector for the hook
     /// @return BeforeSwapDelta The hook's delta in specified and unspecified currencies. Positive: the hook is owed/took currency, negative: the hook owes/sent currency
+    /// @return uint24 Optionally override the lp fee, only used if three conditions are met: 1) the Pool has a dynamic fee, 2) the value's leading bit is set to 1 (24th bit, 0x800000), 3) the value is less than or equal to the maximum fee (1 million)
     function beforeSwap(
         address sender,
         PoolKey calldata key,
         IPoolManager.SwapParams calldata params,
         bytes calldata hookData
-    ) external returns (bytes4, BeforeSwapDelta);
+    ) external returns (bytes4, BeforeSwapDelta, uint24);
 
     /// @notice The hook called after a swap
     /// @param sender The initial msg.sender for the swap call

src/libraries/Hooks.sol

@@ -8,6 +8,7 @@ import {LPFeeLibrary} from "./LPFeeLibrary.sol";
 import {BalanceDelta, toBalanceDelta, BalanceDeltaLibrary} from "../types/BalanceDelta.sol";
 import {BeforeSwapDelta, BeforeSwapDeltaLibrary} from "../types/BeforeSwapDelta.sol";
 import {IPoolManager} from "../interfaces/IPoolManager.sol";
+import {ParseBytes} from "../libraries/ParseBytes.sol";
 
 /// @notice V4 decides whether to invoke specific hooks by inspecting the leading bits of the address that
 /// the hooks contract is deployed to.
@@ -18,6 +19,7 @@ library Hooks {
     using Hooks for IHooks;
     using SafeCast for int256;
     using BeforeSwapDeltaLibrary for BeforeSwapDelta;
+    using ParseBytes for bytes;
 
     uint256 internal constant BEFORE_INITIALIZE_FLAG = 1 << 159;
     uint256 internal constant AFTER_INITIALIZE_FLAG = 1 << 158;
@@ -125,14 +127,8 @@ library Hooks {
         (success, result) = address(self).call(data);
         if (!success) _revert(result);
 
-        bytes4 expectedSelector;
-        bytes4 selector;
-        assembly {
-            expectedSelector := mload(add(data, 0x20))
-            selector := mload(add(result, 0x20))
-        }
-
-        if (selector != expectedSelector) revert InvalidHookResponse();
+        // Check expected selector and returned selector match.
+        if (result.parseSelector() != data.parseSelector()) revert InvalidHookResponse();
     }
 
     /// @notice performs a hook call using the given calldata on the given hook
@@ -145,7 +141,7 @@ library Hooks {
 
         // If this hook wasnt meant to return something, default to 0 delta
         if (!parseReturn) return 0;
-        (, delta) = abi.decode(result, (bytes4, int256));
+        return result.parseReturnDelta();
     }
 
     /// @notice modifier to prevent calling a hook if they initiated the action
@@ -236,22 +232,22 @@ library Hooks {
     /// @notice calls beforeSwap hook if permissioned and validates return value
     function beforeSwap(IHooks self, PoolKey memory key, IPoolManager.SwapParams memory params, bytes calldata hookData)
         internal
-        returns (int256 amountToSwap, BeforeSwapDelta hookReturn)
+        returns (int256 amountToSwap, BeforeSwapDelta hookReturn, uint24 lpFeeOverride)
     {
         amountToSwap = params.amountSpecified;
-        if (msg.sender == address(self)) return (amountToSwap, BeforeSwapDeltaLibrary.ZERO_DELTA);
+        if (msg.sender == address(self)) return (amountToSwap, BeforeSwapDeltaLibrary.ZERO_DELTA, lpFeeOverride);
 
         if (self.hasPermission(BEFORE_SWAP_FLAG)) {
-            bool canReturnDelta = self.hasPermission(BEFORE_SWAP_RETURNS_DELTA_FLAG);
-            hookReturn = BeforeSwapDelta.wrap(
-                self.callHookWithReturnDelta(
-                    abi.encodeWithSelector(IHooks.beforeSwap.selector, msg.sender, key, params, hookData),
-                    canReturnDelta
-                )
-            );
+            bytes memory result =
+                callHook(self, abi.encodeWithSelector(IHooks.beforeSwap.selector, msg.sender, key, params, hookData));
+
+            // dynamic fee pools that do not want to override the cache fee, return 0 otherwise they return a valid fee with the override flag
+            if (key.fee.isDynamicFee()) lpFeeOverride = result.parseFee();
 
             // skip this logic for the case where the hook return is 0
-            if (canReturnDelta) {
+            if (self.hasPermission(BEFORE_SWAP_RETURNS_DELTA_FLAG)) {
+                hookReturn = BeforeSwapDelta.wrap(result.parseReturnDelta());
+
                 // any return in unspecified is passed to the afterSwap hook for handling
                 int128 hookDeltaSpecified = hookReturn.getSpecifiedDelta();
 

src/libraries/LPFeeLibrary.sol

@@ -9,18 +9,29 @@ library LPFeeLibrary {
     /// @notice Thrown when the static or dynamic fee on a pool exceeds 100%.
     error FeeTooLarge();
 
-    uint24 public constant STATIC_FEE_MASK = 0x7FFFFF;
+    uint24 public constant FEE_MASK = 0x7FFFFF;
+    uint24 public constant OVERRIDE_MASK = 0xBFFFFF;
+
+    // the top bit of the fee in a PoolKey is used to signal if a Pool's LP fee is dynamic
     uint24 public constant DYNAMIC_FEE_FLAG = 0x800000;
 
+    // the second bit of the fee returned by beforeSwap is used to signal if the stored LP fee should be overridden in this swap
+    // only dynamic-fee pools can return a fee via the beforeSwap hook
+    uint24 public constant OVERRIDE_FEE_FLAG = 0x400000;
+
     // the lp fee is represented in hundredths of a bip, so the max is 100%
     uint24 public constant MAX_LP_FEE = 1000000;
 
     function isDynamicFee(uint24 self) internal pure returns (bool) {
         return self & DYNAMIC_FEE_FLAG != 0;
     }
 
+    function isValid(uint24 self) internal pure returns (bool) {
+        return self <= MAX_LP_FEE;
+    }
+
     function validate(uint24 self) internal pure {
-        if (self > MAX_LP_FEE) revert FeeTooLarge();
+        if (!self.isValid()) revert FeeTooLarge();
     }
 
     function getInitialLPFee(uint24 self) internal pure returns (uint24) {
@@ -29,4 +40,20 @@ library LPFeeLibrary {
         self.validate();
         return self;
     }
+
+    /// @notice returns true if the fee has the override flag set (top bit of the uint24)
+    function isOverride(uint24 self) internal pure returns (bool) {
+        return self & OVERRIDE_FEE_FLAG != 0;
+    }
+
+    /// @notice returns a fee with the override flag removed
+    function removeOverrideFlag(uint24 self) internal pure returns (uint24) {
+        return self & OVERRIDE_MASK;
+    }
+
+    /// @notice Removes the override flag and validates the fee (reverts if the fee is too large)
+    function removeOverrideAndValidate(uint24 self) internal pure returns (uint24 fee) {
+        fee = self.removeOverrideFlag();
+        fee.validate();
+    }
 }

src/libraries/ParseBytes.sol

@@ -0,0 +1,29 @@
+// SPDX-License-Identifier: GPL-2.0-or-later
+
+pragma solidity ^0.8.20;
+
+/// @notice Parses bytes returned from hooks and the byte selector used to check return selectors from hooks.
+/// @dev parseSelector also is used to parse the expected selector
+/// For parsing hook returns, note that all hooks return either bytes4 or (bytes4, 32-byte-delta) or (bytes4, 32-byte-delta, uint24).
+library ParseBytes {
+    function parseSelector(bytes memory result) internal pure returns (bytes4 selector) {
+        // equivalent: (selector,) = abi.decode(result, (bytes4, int256));
+        assembly {
+            selector := mload(add(result, 0x20))
+        }
+    }
+
+    function parseFee(bytes memory result) internal pure returns (uint24 lpFee) {
+        // equivalent: (,, lpFee) = abi.decode(result, (bytes4, int256, uint24));
+        assembly {
+            lpFee := mload(add(result, 0x60))
+        }
+    }
+
+    function parseReturnDelta(bytes memory result) internal pure returns (int256 hookReturn) {
+        // equivalent: (, hookReturnDelta) = abi.decode(result, (bytes4, int256));
+        assembly {
+            hookReturn := mload(add(result, 0x40))
+        }
+    }
+}

src/libraries/Pool.sol

@@ -21,6 +21,7 @@ library Pool {
     using Position for Position.Info;
     using Pool for State;
     using ProtocolFeeLibrary for uint24;
+    using LPFeeLibrary for uint24;
 
     /// @notice Thrown when tickLower is not below tickUpper
     /// @param tickLower The invalid tickLower
@@ -294,6 +295,7 @@ library Pool {
         bool zeroForOne;
         int256 amountSpecified;
         uint160 sqrtPriceLimitX96;
+        uint24 lpFeeOverride;
     }
 
     /// @notice Executes a swap against the state, and returns the amount deltas of the pool
@@ -317,8 +319,11 @@ library Pool {
         state.feeGrowthGlobalX128 = zeroForOne ? self.feeGrowthGlobal0X128 : self.feeGrowthGlobal1X128;
         state.liquidity = cache.liquidityStart;
 
-        swapFee =
-            cache.protocolFee == 0 ? slot0Start.lpFee : uint24(cache.protocolFee).calculateSwapFee(slot0Start.lpFee);
+        // if the beforeSwap hook returned a valid fee override, use that as the LP fee, otherwise load from storage
+        uint24 lpFee =
+            params.lpFeeOverride.isOverride() ? params.lpFeeOverride.removeOverrideAndValidate() : slot0Start.lpFee;
+
+        swapFee = cache.protocolFee == 0 ? lpFee : uint24(cache.protocolFee).calculateSwapFee(lpFee);
 
         bool exactInput = params.amountSpecified < 0;
 

src/libraries/ProtocolFeeLibrary.sol

@@ -18,7 +18,7 @@ library ProtocolFeeLibrary {
         return uint16(self >> 12);
     }
 
-    function validate(uint24 self) internal pure returns (bool) {
+    function isValidProtocolFee(uint24 self) internal pure returns (bool) {
         if (self != 0) {
             uint16 fee0 = getZeroForOneFee(self);
             uint16 fee1 = getOneForZeroFee(self);

src/test/BaseTestHooks.sol

@@ -72,7 +72,7 @@ contract BaseTestHooks is IHooks {
         PoolKey calldata, /* key **/
         IPoolManager.SwapParams calldata, /* params **/
         bytes calldata /* hookData **/
-    ) external virtual returns (bytes4, BeforeSwapDelta) {
+    ) external virtual returns (bytes4, BeforeSwapDelta, uint24) {
         revert HookNotImplemented();
     }
 

src/test/CustomCurveHook.sol

@@ -37,7 +37,7 @@ contract CustomCurveHook is BaseTestHooks {
         PoolKey calldata key,
         IPoolManager.SwapParams calldata params,
         bytes calldata /* hookData **/
-    ) external override onlyPoolManager returns (bytes4, BeforeSwapDelta) {
+    ) external override onlyPoolManager returns (bytes4, BeforeSwapDelta, uint24) {
         (Currency inputCurrency, Currency outputCurrency, uint256 amount) = _getInputOutputAndAmount(key, params);
 
         // this "custom curve" is a line, 1-1
@@ -47,7 +47,7 @@ contract CustomCurveHook is BaseTestHooks {
 
         // return -amountSpecified as specified to no-op the concentrated liquidity swap
         BeforeSwapDelta hookDelta = toBeforeSwapDelta(int128(-params.amountSpecified), int128(params.amountSpecified));
-        return (IHooks.beforeSwap.selector, hookDelta);
+        return (IHooks.beforeSwap.selector, hookDelta, 0);
     }
 
     function afterAddLiquidity(