Leading DeFi decentralized exchange (DEX) aggregator, 1inch, on Tuesday announced the launch of Aqua, a self-custodial shared liquidity layer that enables liquidity providers to use the same wallet balance across multiple positions without locking assets in liquidity pools.
1inch unveils Aqua for better DeFi liquidity efficiency
Recent research by Dune found that as much as 85 percent of DeFi liquidity is underutilized – implying that roughly $1.6 billion in capital isn’t earning what it could. This figure includes about $542 million sitting fully out of range in an average week, resulting in an estimated $150 million in fees foregone per year. Aqua aims to address exactly this.
According to the announcement, Aqua offers one of the first risk-controlled alternatives to the traditional DeFi pool-based model. As a result, Aqua facilitates more capital-efficient liquidity provisioning.
To explain in simple words, 1inch’s Aqua functions as a registry, where a user connects their wallet to approve a token balance, and creates liquidity positions that can access that balance.
The Aqua protocol tracks that balance, and when it receives a swap order that meets the criteria of the position, it pulls the requested tokens from the wallet and pushes back received tokens and fees in a single atomic transaction.
Otherwise, the user’s tokens remain in their wallet and completely under their control. Commenting on Aqua’s launch, Sergej Kunz, co-founder, 1inch, said:
“The liquidity provisioning space is broken, but you only see how broken once there’s an alternative. Today, that alternative has arrived. With Aqua, liquidity providers no longer have to accept the inefficient pool structure they’ve put up with for years. DeFi doesn’t just need more liquidity. It needs more useful liquidity, active wherever demand appears. We built Aqua so providers get that reach without giving up custody: your tokens stay in your wallet until the moment a swap fills.”
Unlike the traditional model, where liquidity must be split across multiple pools and positions, Aqua allows a single balance to support multiple quotes at once. For example, a $100,000 balance can support three positions collectively quoting $300,000 of liquidity, with the potential to quote more.
A position opened on Aqua can be full ranged, concentrated, or pegged – largely depending on the selected pair and position type. A user can open and close positions themselves, with no lock-up.
Their exposure is capped by the tokens they actually hold, not by the theoretical combined size of every position they create. If their wallet cannot cover a swap, Aqua simply does not call on their tokens.
It is worth highlighting that Aqua saw its developer launch back in November 2025, and today’s launch represents one of 1inch’s biggest protocol upgrades in years. The product is available on 13 EVM chains, including Ethereum, Arbitrum, Base, Robinhood Chain and BNB Chain.
Taking blockchain security seriously
So far, 2026 has seen a slew of DeFi exploits and hacks, resulting in loss of users’ funds worth millions of dollars. Against that backdrop, Aqua has undergone 8 independent security audits conducted by OpenZeppelin, Bailsec, Hashlock, Hexens, MixBytes, Nethermind, Theori, and Decurity.
Further bolstered by its self-custodial design – which never holds user tokens – a swap can only move assets that are actually in the provider’s wallet at the moment it fills. In addition, revocation stops new fills as soon as it confirms on-chain.
Aqua is also protected from JIT fee sniping by design, as each position has a single owner, thus there is no shared fee moment bots can capitalize on.
While Aqua’s design keeps exposure bounded and providers in control of their own tokens, swap fees are not guaranteed, prices can move against a position (impermanent loss), and providers bear market and smart-contract risk.
Launching the 1inch Network Incentives
Besides the Aqua launch, 1inch also announced the go-live of their Network Incentives. The liquidity reward program is being led by Degensoft Ltd (BVI), and delivered through Merkl.
Notably, The 1inch Foundation has committed 10 million 1INCH in provider rewards, and a further 500,000 USDC boost from the 1inch DAO.
The initiative is geared toward fostering liquidity growth and swap activity across supported trading pairs. Consequently, liquidity providers will not only benefit from Aqua’s enhanced experience, but also have the opportunity to earn additional rewards.
