Arbitrum Stylus

Pricing & profit innovation hooks

• Innovate pricing structures to capture more value and align incentives between participants
• Example: Implement a custom pricing curve with hooks that dynamically adjusts token prices based on supply and demand using mathematical models like linear, exponential, or sigmoid curves. It should support real-time pricing adjustments, fair distribution, and revenue optimization, making it especially valuable for token launches or early liquidity provision.

Risk management & security hooks

• Strengthen the system with robust, manipulation-resistant mechanisms.
• Example: Train an ML model off-chain using historical on-chain data to predict future volatility, then embed the model in a Stylus contract for efficient, low-cost execution. The contract should integrate hooks to dynamically adjust swap fees: increasing fees during high volatility to protect liquidity providers and mitigate impermanent loss, while lowering fees during low volatility to encourage trading.
• Example: Create a Median Price Oracle created with hooks that calculates the median of recent pool prices to provide a robust and manipulation-resistant on-chain price feed. Unlike TWAPs or simple averages, this hook ensures price stability by filtering out outliers and sudden spikes, making it ideal for DeFi protocols relying on accurate price data for liquidations, lending, or trading.

Liquidity & yield optimization hooks

• Maximize returns and improve liquidity management with strategic automation.
• Example: Implement a TWAMM hook to split large orders into smaller, time-distributed trades, reducing slippage and minimizing market impact. This hook would automate the execution of partial trades at regular intervals. By spreading out the execution over time, it ensures smoother price adjustments and steadier liquidity utilization.

User experience (UX) hooks

• Enhance user interactions through efficient, real-time, and automated features
• Example: An on-chain limit order feature that allows users to specify a price range and provide liquidity for either token in the pool, with automated execution when the market crosses the user's target range. This could support advanced functionalities like partial fills, order expirations, and dynamic fee customizations.

Social & gamified engagement hooks

• Drive user engagement through incentives.
• Example: A Loyalty Tier Fee Hook that dynamically adjusts swap fees and rewards based on user engagement metrics such as trading volume, liquidity duration, and transaction frequency. The hook should efficiently track user-specific data, calculate loyalty scores in real-time, and apply tier-based fee adjustments during each interaction. Users will be assigned to loyalty tiers, each offering progressively greater benefits such as fee discounts or bonus rewards.