Can I set state inside a useEffect hook

Generally speaking, using setState inside useEffect will create an infinite loop that most likely you don't want to cause. There are a couple of exceptions to that rule which I will get into later.

useEffect is called after each render and when setState is used inside of it, it will cause the component to re-render which will call useEffect and so on and so on.

One of the popular cases that using useState inside of useEffect will not cause an infinite loop is when you pass an empty array as a second argument to useEffect like useEffect(() => {....}, []) which means that the effect function should be called once: after the first mount/render only. This is used widely when you're doing data fetching in a component and you want to save the request data in the component's state.

For future purposes, this may help too:

It's ok to use setState in useEffect . To do so, however, you need to ensure you don't unintentionally create an infinite loop.

An infinite loop is not the only problem that may occur. See below:

Imagine that you have a component Comp that receives props from parent and according to a props change, you want to set Comp's state. For some reason, you need to change for each prop in a different useEffect:

DO NOT DO THIS

useEffect(() => {
  setState({ ...state, a: props.a });
}, [props.a]);

useEffect(() => {
  setState({ ...state, b: props.b });
}, [props.b]);

It may never change the state of a , as you can see in this example: https://codesandbox.io/s/confident-lederberg-dtx7w

The reason this occurs is that both useEffect hooks run during the same react render cycle. When props.a and props.b change at the same time, each useEffect captures the same stale state value from before the update. As a result, when the first effect runs, it calls setState({ ...state, a: props.a }) . Then, the second effect runs immediately after and calls setState({ ...state, b: props.b}) with the same stale state value, thereby overwriting the first update. The result is that a never appears to update. The second setState replaces the first one rather than merging the two updates together.

DO THIS INSTEAD

The solution to this problem is to call setState like this:

useEffect(() => {
  setState(previousState => ({ ...previousState, a: props.a }));
}, [props.a]);

useEffect(() => {
  setState(previousState => ({ ...previousState, b: props.b }));
}, [props.b]);

For more information, check the solution here: https://codesandbox.io/s/mutable-surf-nynlx

With this approach, you will always receive the most updated and correct value of the state.

useEffect can hook on a certain prop or state. so, the thing you need to do to avoid infinite loop hook is binding some variable or state to effect

For Example:

useEffect(myeffectCallback, [])

above effect will fire only once the component has rendered. this is similar to componentDidMount lifecycle

const [something, setSomething] = useState(0)
const [myState, setMyState] = useState(0)
useEffect(() => {
  setSomething(0)
}, [myState])

above effect will fire only my state has changed this is similar to componentDidUpdate except not every changing state will fire it.

You can read more detail though this link

▶ 1. Can I set state inside a useEffect hook?

In principle, you can set state freely where you need it - including inside useEffect and even during rendering. Just make sure to avoid infinite loops by settting Hook deps properly and/or state conditionally.

▶ 2. Lets say I have some state that is dependent on some other state. Is it appropriate to create a hook that observes A and sets B inside the useEffect hook?

You just described the classic use case for useReducer:

useReducer is usually preferable to useState when you have complex state logic that involves multiple sub-values or when the next state depends on the previous one. (React docs)

When setting a state variable depends on the current value of another state variable, you might want to try replacing them both with useReducer. [...] When you find yourself writing setSomething(something => ...), it’s a good time to consider using a reducer instead. (Dan Abramov, Overreacted blog)

let MyComponent = () => {
  let [state, dispatch] = useReducer(reducer, { a: 1, b: 2 });

  useEffect(() => {
    console.log("Some effect with B");
  }, [state.b]);

  return (
    <div>
      <p>A: {state.a}, B: {state.b}</p>
      <button onClick={() => dispatch({ type: "SET_A", payload: 5 })}>
        Set A to 5 and Check B
      </button>
      <button onClick={() => dispatch({ type: "INCREMENT_B" })}>
        Increment B
      </button>
    </div>
  );
};

// B depends on A. If B >= A, then reset B to 1.
function reducer(state, { type, payload }) {
  const someCondition = state.b >= state.a;

  if (type === "SET_A")
    return someCondition ? { a: payload, b: 1 } : { ...state, a: payload };
  else if (type === "INCREMENT_B") return { ...state, b: state.b + 1 };
  return state;
}

ReactDOM.render(<MyComponent />, document.getElementById("root"));

<script src="https://cdnjs.cloudflare.com/ajax/libs/react/16.13.0/umd/react.production.min.js" integrity="sha256-32Gmw5rBDXyMjg/73FgpukoTZdMrxuYW7tj8adbN8z4=" crossorigin="anonymous"></script>
<script src="https://cdnjs.cloudflare.com/ajax/libs/react-dom/16.13.0/umd/react-dom.production.min.js" integrity="sha256-bjQ42ac3EN0GqK40pC9gGi/YixvKyZ24qMP/9HiGW7w=" crossorigin="anonymous"></script>
<div id="root"></div>
<script>var { useReducer, useEffect } = React</script>

▶ 3. Will the effects cascade such that, when I click the button, the first effect will fire, causing b to change, causing the second effect to fire, before the next render?

useEffect always runs after the render is committed and DOM changes are applied. The first effect fires, changes b and causes a re-render. After this render has completed, second effect will run due to b changes.

let MyComponent = props => {
  console.log("render");
  let [a, setA] = useState(1);
  let [b, setB] = useState(2);

  let isFirstRender = useRef(true);

  useEffect(() => {
    console.log("useEffect a, value:", a);
    if (isFirstRender.current) isFirstRender.current = false;
    else setB(3);
    return () => {
      console.log("unmount useEffect a, value:", a);
    };
  }, [a]);
  useEffect(() => {
    console.log("useEffect b, value:", b);
    return () => {
      console.log("unmount useEffect b, value:", b);
    };
  }, [b]);

  return (
    <div>
      <p>a: {a}, b: {b}</p>
      <button
        onClick={() => {
          console.log("Clicked!");
          setA(5);
        }}
      >
        click me
      </button>
    </div>
  );
};

ReactDOM.render(<MyComponent />, document.getElementById("root"));

<script src="https://cdnjs.cloudflare.com/ajax/libs/react/16.13.0/umd/react.production.min.js" integrity="sha256-32Gmw5rBDXyMjg/73FgpukoTZdMrxuYW7tj8adbN8z4=" crossorigin="anonymous"></script>
<script src="https://cdnjs.cloudflare.com/ajax/libs/react-dom/16.13.0/umd/react-dom.production.min.js" integrity="sha256-bjQ42ac3EN0GqK40pC9gGi/YixvKyZ24qMP/9HiGW7w=" crossorigin="anonymous"></script>
<div id="root"></div>
<script>var { useReducer, useEffect, useState, useRef } = React</script>

▶ 4. Are there any performance downsides to structuring code like this?

Yes. By wrapping the state change of b in a separate useEffect for a, the browser has an additional layout/paint phase - these effects are potentially visible for the user. If there is no way you want give useReducer a try, you could change b state together with a directly:

let MyComponent = () => {
  console.log("render");
  let [a, setA] = useState(1);
  let [b, setB] = useState(2);

  useEffect(() => {
    console.log("useEffect b, value:", b);
    return () => {
      console.log("unmount useEffect b, value:", b);
    };
  }, [b]);

  const handleClick = () => {
    console.log("Clicked!");
    setA(5);
    b >= 5 ? setB(1) : setB(b + 1);
  };

  return (
    <div>
      <p>
        a: {a}, b: {b}
      </p>
      <button onClick={handleClick}>click me</button>
    </div>
  );
};

ReactDOM.render(<MyComponent />, document.getElementById("root"));

<script src="https://cdnjs.cloudflare.com/ajax/libs/react/16.13.0/umd/react.production.min.js" integrity="sha256-32Gmw5rBDXyMjg/73FgpukoTZdMrxuYW7tj8adbN8z4=" crossorigin="anonymous"></script>
<script src="https://cdnjs.cloudflare.com/ajax/libs/react-dom/16.13.0/umd/react-dom.production.min.js" integrity="sha256-bjQ42ac3EN0GqK40pC9gGi/YixvKyZ24qMP/9HiGW7w=" crossorigin="anonymous"></script>
<div id="root"></div>
<script>var { useReducer, useEffect, useState, useRef } = React</script>

Try wrapping the setState inside an if-statement that checks whether the state needs to be changed - if yes, change it, else return () => {}

e.g.,

useEffect(() => {
    if(a.currentCondition !== a.desiredCondition) {
        setA();
    }
    return cleanup;
}, [b])