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The first leg of DeFi’s liquidity race was about attracting capital. The next is about putting it to work.
A July Dune <a href="https://dune.com/blog/capital-efficiency-decentralized-exchanges” rel=”nofollow noopener” target=”_blank”>study for 1inch found that 29.5% of capital across roughly 200 major on-chain pools sat outside active price ranges during the first half of 2026. This equates to about $542 million in idle capital in an average week.
For liquidity providers, that leaves substantial potential yield on the table. DeFi protocols including 1inch, Aave, and Uniswap are now pursuing different ways to put that capital to use.
On July 28, 1inch rolled out Aqua, its shared liquidity protocol
1inch, a decentralized exchange aggregator, is betting on its shared-liquidity protocol Aqua. Launched publicly on July 28, Aqua allows the same wallet balance to support multiple positions rather than requiring liquidity providers to divide capital among separate pools.
“It’s all about efficiency,” 1inch co-founder Sergej Kunz told CoinMarketCap in an August interview.
Aqua’s Early Numbers Show Traction
Early usage suggests the model is gaining traction. Aqua has processed $137.6 million in trading volume since launch, including $72.8 million in the past seven days. Its live leaderboardshowed 573 liquidity providers.
Traders are taking notice. The protocol’s native token (1INCH) is up roughly 14% over the past 30 days and has a market capitalization of about $116 million
The 1INCH token has gained nearly 14% in the past month
Aqua is part of a broader push to rethink how DeFi capital is deployed. Alongside it, Uniswap is putting market-making inventory to work between swaps, while Aave V4 pools liquidity across lending markets.
The protocols take different routes, but each aims to sharply reduce the amount of DeFi liquidity sitting idle.
Why Concentrated Liquidity Wasn’t Enough
DeFi’s first capital-efficiency push kicked off in 2021, when automated market makers (AMMs) like Uniswap embraced concentrated liquidity. This model lets users provide liquidity within narrower price ranges where trading activity is highest.
Still, that capital remains tied to one pool and becomes inactive when prices move outside the range.
Aqua has seen nearly $140 million in total volume since launch
Aqua is different. Instead of making capital work harder within one pool, it lets several positions draw from the same wallet balance.
“The same 10,000 USDC you can use for three, four, five, six positions at the same time,” Kunz said.
As of Aug. 17, Aqua’s $12.2 million in deposited liquidity supports $22.5 million in shared liquidity, according to its leaderboard.
The Capital-Efficiency Race Is Getting Crowded
1inch isn’t the only DeFi protocol tapping into idle capital.
On July 22, Uniswap Labs launched DualPool. It keeps market-making inventory in yield-bearing vaults between trades and moves it into concentrated liquidity only when needed.
Like Aqua, DualPool is already seeing traction. Spark, a DeFi capital allocator backed by Sky, migrated $150 million in stablecoin liquidity to Uniswap v4 ahead of the launch.
Meanwhile, Aave V4 tackles fragmentation from the lending side. Its Hub-and-Spoke architecture lets multiple lending markets draw from shared Liquidity Hubs instead of building separate supplier bases.
Aave founder Stani Kulechov described the goal in a March 2026 interview with The Rollup as separating risk without fragmenting capital.
“You can segregate risk while at the same time you are not segregating liquidity,” he said.
AMMs Aren’t Going Away
At first glance, the shift toward shared liquidity makes DeFi look increasingly similar to professional market making in traditional finance.
But Kunz does not expect AMMs to simply give way to on-chain order-book trading.
“I think we need both,” he said.
Kunz does, however, see shared liquidity opening the door to institutions. Aqua positions, for example, can restrict settlement to verified counterparties. He added that 1inch is already speaking with prospective liquidity providers, including for stablecoin-related use cases.
“We are building institutional-ready protocols,” Kunz said.
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Source: coinmarketcap.com