1inch kicked off its Aqua liquidity protocol to the public on July 28, backing the debut with a substantial rewards program: 10 million 1INCH tokens and 500,000 USDC. The initiative spans three months and is channeled through the incentive platform Merkl, targeting over 80 markets within the 1INCH ecosystem. BNB Chain is named the first co-incentive partner, highlighting cross-chain support.
Aqua introduces a fresh take on liquidity provision. Instead of locking tokens into pools, liquidity providers approve a wallet balance that multiple positions can quote from simultaneously. For example, a $100,000 wallet balance can support quotes totaling $300,000, with actual execution capped by available funds. This setup lets tokens remain in the provider’s wallet until a swap executes, improving capital efficiency and flexibility.
Aiming to Fix Inefficient Pool Models
According to 1inch and its partner Dune’s on-chain research, 85% of concentrated liquidity on major DEXs was underused in early 2026, representing nearly $1.6 billion out of $1.84 billion tracked. Roughly $542 million was entirely out of range weekly, resulting in an estimated $150 million in missed fees per year. Aqua hopes to cut through this wasted capital by letting liquidity providers allocate funds more dynamically and without lock-ups.
The protocol’s security has been vetted through eight independent audits by firms like OpenZeppelin and MixBytes. While providers still face market and smart contract risks, the architecture is designed to reduce exposure to idle tokens. This launch marks a significant move from traditional pool mechanics that have long dominated decentralized exchanges.
This content is for informational purposes and does not constitute financial advice.
