The "Hot Path" is an informal term referring to the chain of events that happens inside Vault as a result of an external instruction to move money to/from the bank. As this happens off the back of a Payment Integration layer (for example, an attempt to withdraw cash), there are likely SLAs made regarding latency and the operation is time sensitive. This has motivated (in /reference/contracts/apis/smart_contracts_api_reference3XX/) the splitting of the pre_posting_code and post_posting_code hooks.