Uniswap launches ‘StablePair Hook’ to help LPs capture more stablecoin trading value

Uniswap Labs, the team behind the decentralized exchange protocol, has launched "StablePair Hook," a new Uniswap v4 hook built for stablecoin pairs such as USDC/USDT and USDC/USDG. The company said the first pools are going live on Ethereum with USDC/USDG and USDC/USDT.

The product targets one of the largest segments of onchain trading. Uniswap Labs said stablecoin-to-stablecoin swaps on Uniswap totaled $43.4 billion in the second quarter, more than the next three onchain venues combined.

Stablecoin pairs typically trade at a fixed rate, such as 1:1 for two dollar-pegged tokens. When the price drifts from parity, traders and bots can profit by pushing it back. StablePair Hook is designed to let liquidity providers retain a larger share of that value. "StablePair Hook gives traders consistent, predictable quotes on every swap, and LPs a bigger share of the value they create," Uniswap Labs said.

Dynamic fees and a Dutch auction

The hook swaps a fixed fee for a dynamic one that responds to how far the pool price moves from its reference price. While the price stays close to that reference, the hook adjusts the fee on each trade to hold a fixed spread between buying and selling prices. If the price moves outside that range, trades that push it further away pay no fee, since they already offer the pool a favorable price.

Trades that move the price back toward the reference price are handled through a Dutch auction, where the fee starts high and declines with each block until a trader accepts it. According to Uniswap Labs, this lets liquidity providers keep more of the value generated by restoring parity.

The hook can also be upgraded through Uniswap governance, allowing its fee system and other parameters to change without migrating liquidity into new pools. Uniswap Labs described it as its first upgradeable dynamic-fee hook, following DualPool, which launched in July alongside Spark's $150 million stablecoin migration, and Permissioned Pools, built with Superstate, Securitize and Dowgo for permissioned asset trading.

Hooks are a core feature of Uniswap v4, letting pools add custom rules, fees and pricing logic instead of relying on a single standard model. Uniswap Labs said more than $38 billion in swap volume has passed through v4 hooks to date, including $32 billion this year, with over 90,000 hooks initialized across 20 chains.