diff --git a/crates/aiken-lang/src/ast.rs b/crates/aiken-lang/src/ast.rs
index 2a32a25e..1c94123d 100644
--- a/crates/aiken-lang/src/ast.rs
+++ b/crates/aiken-lang/src/ast.rs
@@ -266,6 +266,16 @@ pub struct Function<T, Expr, Arg> {
     pub on_test_failure: OnTestFailure,
 }
 
+impl<T, Expr, Arg> Function<T, Expr, Arg> {
+    pub fn is_spend(&self) -> bool {
+        self.name == HANDLER_SPEND
+    }
+
+    pub fn is_mint(&self) -> bool {
+        self.name == HANDLER_MINT
+    }
+}
+
 impl TypedFunction {
     pub fn find_node(&self, byte_index: usize) -> Option<Located<'_>> {
         self.arguments
@@ -279,10 +289,6 @@ impl TypedFunction {
             })
     }
 
-    pub fn is_spend(&self) -> bool {
-        self.name == HANDLER_SPEND
-    }
-
     pub fn has_valid_purpose_name(&self) -> bool {
         self.name == HANDLER_SPEND
             || self.name == HANDLER_PUBLISH
@@ -1245,6 +1251,15 @@ impl Annotation {
         }
     }
 
+    pub fn option(inner: Annotation) -> Self {
+        Annotation::Constructor {
+            name: "Option".to_string(),
+            module: None,
+            location: inner.location(),
+            arguments: vec![inner],
+        }
+    }
+
     pub fn is_logically_equal(&self, other: &Annotation) -> bool {
         match self {
             Annotation::Constructor {
diff --git a/crates/aiken-lang/src/tipo/environment.rs b/crates/aiken-lang/src/tipo/environment.rs
index 7f008f60..a9b4c3a6 100644
--- a/crates/aiken-lang/src/tipo/environment.rs
+++ b/crates/aiken-lang/src/tipo/environment.rs
@@ -1275,10 +1275,9 @@ impl<'a> Environment<'a> {
                 location,
                 end_position: _,
             }) if kind.is_validator() => {
-                let default_annotation = |mut arg: UntypedArg| {
+                let default_annotation = |mut arg: UntypedArg, ann: Annotation| {
                     if arg.annotation.is_none() {
-                        arg.annotation = Some(Annotation::data(arg.location));
-
+                        arg.annotation = Some(ann);
                         arg
                     } else {
                         arg
@@ -1287,12 +1286,29 @@ impl<'a> Environment<'a> {
 
                 let mut handler_names = vec![];
 
+                let params_len = params.len();
+
                 for handler in handlers {
                     let temp_params: Vec<UntypedArg> = params
                         .iter()
                         .cloned()
                         .chain(handler.arguments.clone())
-                        .map(default_annotation)
+                        .enumerate()
+                        .map(|(ix, arg)| {
+                            let is_datum = handler.is_spend() && ix == params_len;
+                            let is_mint_policy = handler.is_mint() && ix == params_len + 1;
+                            let location = arg.location;
+                            default_annotation(
+                                arg,
+                                if is_datum {
+                                    Annotation::option(Annotation::data(location))
+                                } else if is_mint_policy {
+                                    Annotation::bytearray(location)
+                                } else {
+                                    Annotation::data(location)
+                                },
+                            )
+                        })
                         .collect();
 
                     handler_names.push(handler.name.clone());
@@ -1312,7 +1328,10 @@ impl<'a> Environment<'a> {
                     .iter()
                     .cloned()
                     .chain(fallback.arguments.clone())
-                    .map(default_annotation)
+                    .map(|arg| {
+                        let location = arg.location;
+                        default_annotation(arg, Annotation::data(location))
+                    })
                     .collect();
 
                 self.register_function(