DeFi liquidity providers are leaving about $150 million a year on the table. A study conducted by analytics firm Dune found that roughly 85% of the liquidity on major decentralized exchanges
DeFi liquidity providers are leaving about $150 million a year on the table.
A study conducted by analytics firm Dune found that roughly 85% of the liquidity on major decentralized exchanges (DEX) sits idle — around $1.6 billion in all, doing nothing.
That inefficiency is the problem 1inch says it built Aqua to solve.
On July 28, the DeFi ecosystem announced the full public launch of Aqua, a self-custodial shared liquidity layer that lets providers use the same wallet balance across multiple positions without locking assets in a pool. A developer version shipped in November 2025; after roughly a year of stress-testing, it is now open to everyone.
Sergej Kunz, co-founder of 1inch, joined TheStreet Roundtable to explain how it works and why he thinks it beats the traditional pool model.
"We did together with Dune some research in terms of how much of the liquidity sits idle in the Uniswap pools, for example, and even Curve pools. And it looks like 85% of the liquidity sits idle and it's not working," Kunz said.
The numbers are stark.
Dune rebuilt every position in about 200 top pools across Uniswap v3 and v4, PancakeSwap v3 and Aerodrome over 26 weekly snapshots on seven chains between Jan. 6 and June 30. It found roughly $1.6 billion of the $1.84 billion in average weekly liquidity was underutilized, with about $542 million sitting fully out of range in an average week and a third of positions untouched for 90 days or more. T
Related: New research finds $1.6 billion in DeFi liquidity sitting unused
Aqua operates as a registry. A provider connects a wallet and approves a token balance, then creates positions that can draw on it. When a swap order matches a position, the protocol pulls the needed tokens from the wallet and pushes back the received tokens and fees in a single atomic transaction. The rest of the time, the tokens simply stay in the wallet, fully under the owner's control.
The efficiency comes from reuse. The same balance can back several positions at once, so a single deposit quotes liquidity in more places than a pool deposit could.
"This is not like providing in a pool. You have your assets in your wallet and you just define your trading strategies," Kunz said. "Just imagine you have 10,000 USDC and 10,000 in Ethereum. If you put it in a Uniswap pool, these assets are locked. You cannot use the same assets for another pair. But in Aqua you can."
Crucially, that reuse is not borrowing.
According to 1inch, a $100,000 balance can support three positions collectively quoting $300,000 of liquidity, but any swap can only ever execute against the assets actually held in the wallet. A provider's exposure is capped by the tokens they hold, not by the combined size of every position they open, and if the wallet cannot cover a swap, Aqua simply does not call on it. Positions can be full-range, concentrated or pegged, with no lock-up, and can be opened or closed at will.
Aqua goes live across 13 EVM chains from day one, including Ethereum, Arbitrum, Base, BNB Chain and Robinhood Chain. To seed activity, 1inch is pairing the launch with an incentive program delivered through Merkl: the 1inch Foundation has committed 10 million 1INCH tokens in provider rewards, with an additional 500,000 USDC from the 1inch DAO.
The protocol also ships with a liquidity leaderboard, an incentives screen, liquidity-map visualizations, batch position creation, cross-chain provider profiles and sub-wallets, with an AI-assisted provisioning flow via the 1inch Business MCP listed as coming soon. 1inch says Aqua underwent eight independent security audits, from firms including OpenZeppelin, Nethermind, Hexens and Theori.
The architecture is deliberately open, in the spirit of Uniswap v4's hooks. Developers can write their own strategies and money markets can plug in adapters, which is where Aqua stops being a liquidity tool and starts being a leverage machine.
Theoretically it's possible to build a strategy on Aqua for Aave," Kunz said. "You could leverage your positions and loop into Aave. You could theoretically make out of your ten thousand USDC thirty or forty thousand USDC."
Looping, or borrowing against a position to fund a bigger version of the same position multiplies fees on the way up and losses on the way down, and a wallet whose tokens back several markets at once is doing something structurally similar to what traditional finance calls rehypothecation.
