Uniswap Launches Dynamic Fees for USDC Pools

Uniswap Labs has launched StablePair Hook, a Uniswap v4 tool that dynamically sets liquidity-provider fees for two stable-pair pools on Ethereum. The feature is now live for $USDC/USDT and $USDC/USDG pools.

The hook adjusts fees based on the pool's price and trade direction. It configures each pool with a reference rate and a narrow band around it, setting the LP fee from the pool price, its distance from the reference rate, and the direction of the proposed trade.

Uniswap stated that a low fee would leave more of the corrective spread to arbitrageurs, while a high fee can make the pool's quotes uncompetitive. The mechanism does not eliminate price impact, as the fee is independent of swap size.