1inch launches Aqua: a new era of DeFi liquidity without custodial risks
The DEX aggregator 1inch has officially opened public access to the "shared" liquidity protocol Aqua, completing an eight-month beta testing period. This decision marks a significant step in the evolution of decentralized finance, offering liquidity providers a fundamentally new approach to asset management.
Aqua is a non-custodial system that allows supporting multiple trading positions from a single wallet without the need to send tokens to a pool. The platform is already deployed across 13 EVM-compatible networks, including Ethereum, Arbitrum, Base, BNB Chain, and Robinhood Chain. The mechanism operates on a registry basis: the provider signs an authorization for a specific balance, and Aqua debits tokens only at the moment an order matching the position conditions is executed. At all other times, the funds remain under the user's full control.
Aqua's key advantage is risk limitation. Unlike traditional pools, where the provider risks the entire deposited amount, here risks are limited only to those tokens that are actually in the wallet. If the balance is insufficient to cover a trade, the system simply ignores the request. For example, a balance of $100,000 can simultaneously serve three positions with a total liquidity quote of $300,000, significantly increasing capital efficiency.
1inch claims that Aqua solves two fundamental DeFi problems: the transfer of custodial control when depositing funds into pools and the fragmentation of active capital across different protocols and price ranges. According to Dune data, in the first half of the year, about 85% of concentrated liquidity on the largest DEXs was used inefficiently, amounting to $1.6 billion out of $1.84 billion in tracked funds. Under an alternative calculation method, the average share of idle capital over 26 weeks was 29.5%, equivalent to $542 million per week.
To incentivize early users, the 1inch Foundation has allocated 10 million 1INCH tokens as rewards for liquidity providers, and also plans to allocate an additional 500,000 USDC from the DAO treasury.
My expert opinion: Aqua is not just another liquidity protocol, but a potential catalyst for rethinking the entire DeFi model. By eliminating custodial risks and increasing capital efficiency, 1inch is creating infrastructure that could attract institutional players who were previously wary of losing control over assets. However, success will depend on liquidity depth and the speed of community adoption — competition in this segment is extremely high.