Uniswap V4 Hook Liquidity Not Stored in Hook Contract

Smart Contracts
1

I am working with OpenZeppelin's new Uniswap Hooks Library to experiment with hooks in V4. I am trying to reconcile a comment in the code with the reality that I am experiencing. In short, I am experimenting with creating custom TBC curves using hooks. The comment in question:

This is fine, makes sense, and I am able to override _getAmountIn (which is called inside of addLiquidity) to add liquidity to the curve. Swaps occur as expected.

However, when I call balanceOf for one of the tokens on the hook contract's address, I get an answer of 0. When I call balanceOf on the PoolManager, I get a positive value that comports with the single-sided liquidity adding activity that has occurred. This is confirmed by looking at the traces of a swap:

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The to field in the Transfer event is the address 0xE03A1074c86CFeDd5C142C4F04F1a1536e203543 which is the PoolManager in Sepolia.

What am I missing here? Is liquidity not actually stored in the hook?

2

My ignorance was showing.

After spending a few weeks/months studying V4, it is clear that the PoolManager generally will hold all of the ERC20. In this case, the hook gets newly minted ERC6909 tokens that represent the ERC20 held on its behalf by the PoolManager. Here is a chart that shows the flow:

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