1inch co-founder Sergej Kunz: 85% of DeFi mobility is "idle", Aqua activates it all

DeFi liquidity providers idle approximately US$150 million a year in revenue

A study by analyst firm Dune shows that approximately 85% of liquidity on mainstream decentralized exchanges (DEX) is idle-a total of approximately US$1.6 billion, with nothing done. This inefficiency is exactly what 1inch claims it is trying to solve when launching Aqua.

On July 28, the DeFi Ecosystem announced that Aqua will officially be fully public beta. Aqua is a self-managed shared liquidity layer that allows providers to use the same wallet balance in multiple positions without having to lock assets in the pool. The developer version was released in November 2025; after about a year of stress testing, it is now open to everyone. 1inch co-founder Sergej Kunz explained on the show how Aqua works and why he believes it is superior to traditional pool models.

85% of liquidity is "dormant"

"We partnered with Dune to conduct a study to see how much liquidity is idle in the Uniswap pool and even Curve pool. It turned out that about 85% of the liquidity was idle and not working." Kunz said. The data is shocking. Between January 6 and June 30, Dune took 26 weekly snapshots of approximately 200 top-level pools of Uniswap v3 and v4, PancakeSwap v3 and Aerodrome on seven chains, rebuilding every position. The study found that of an average weekly liquidity of $1.84 billion, about $1.6 billion was underutilized, an average of about $542 million per week was completely out of the price range, and one-third of positions remained untouched for 90 days or more.

How Aqua works

Aqua operates as a registry. The provider connects to the wallet and approves the token balance, and then creates a position that can call on that balance. When a redemption order is matched to a position, the agreement withdraws the required tokens from the wallet and pushes the received tokens and fees back into the wallet in a single atomic transaction. For the rest of the time, the tokens remain only in the wallet and are completely controlled by the owner. Efficiency comes from reuse. The same balance can support multiple positions simultaneously, so a single deposit can provide liquidity in more places than pool deposits cannot. "It's not like providing liquidity in a pool. Your assets are in your wallet, you just need to define your trading strategy." Kunz said,"Imagine you own 10,000 USDC and 10,000 Ethereum. If you deposit them into the Uniswap pool, the assets are locked out. You cannot use the same asset for another trading pair. But in Aqua, you can."

The key is that this reuse is not borrowing. According to 1inch, a balance of $100,000 could support three positions, together providing $300,000 in liquidity, but any conversions could only be executed based on assets actually held in the wallet. A provider's exposure is capped by the tokens it holds, not the total size of all positions it opens. If the wallet cannot override a redemption, Aqua will not invoke the wallet at all. Positions can be full-range, concentrated or anchored, with no lock-up period and can be opened or closed at any time.

Data viewing public beta

Aqua has been launched on 13 EVM chains since day one, including Ethereum, Arbitrum, Base, BNB Chain and Robinhood Chain. To activate liquidity, 1inch launched an incentive plan through Merkl: the 1inch Foundation committed to provide 10 million 1INCH tokens as provider rewards, and an additional 500,000 USDC from the 1inch DAO. The agreement also comes with features such as liquidity leaderboards, incentive interfaces, liquidity map visualization, batch position creation, cross-chain provider profiles and sub-wallets, as well as an AI-assisted configuration process provided through 1inch Business MCP (coming soon). 1inch said Aqua has undergone eight independent security audits, including companies such as OpenZeppelin, Nethermind, Hexens and Theori.

Drawing on the traditional financial model

The architecture remains deliberately open and adheres to the spirit of Uniswap v4 hooks. Developers can write their own strategies, money markets can plug in adapters-at this point Aqua is no longer just a liquidity tool, but a leverage machine. "In theory, you can build strategies for Aave on Aqua." Kunz said,"You can leverage your positions and cycle them on Aave. In theory, you can turn 10,000 USDC into 30,000 or 40,000 USDC." Circular operations, in which money is borrowed to open a larger position of the same kind, amplify gains when rising and losses when falling. Tokens in one wallet support multiple markets at the same time, which is structurally similar to the so-called "remortgage" in traditional finance.