Uniswap launched StablePair Hook, with dynamic fees helping LPs capture the value of stablecoin transactions

Uniswap Labs announced the launch of the new tool StablePair Hook for Uniswap v4, designed specifically for stablecoin trading pairs such as USDC/USDT and USDC/USDG. Uniswap Labs stated that StablePair Hook can provide traders with consistent and predictable quotes while allowing liquidity providers to retain more of the value they create. Data shows that in the second quarter, the trading volume of exchanges between stablecoins on Uniswap reached $43.4 billion, surpassing the total of the other three major on-chain trading venues.

StablePair Hook uses dynamic fees instead of fixed fees, with rates adjusted based on how much the price in the pool deviates from the reference price. When the price is close to the reference price, the Hook adjusts the transaction fee for each trade to maintain a fixed bid-ask spread; when the price deviates from the reference range, trades pushing the price away do not incur fees, while trades pulling the price back to the reference price use a Dutch auction system, with fees decreasing block by block from high to low until accepted by the trader. Uniswap Labs stated that this allows liquidity providers to retain more value from price returns.

The first batch of StablePair Hook pools will go live on Ethereum, supporting USDC/USDG and USDC/USDT trading pairs. This Hook can be upgraded through Uniswap governance, and the fee system and other parameters can be adjusted without migrating liquidity.