1inch (1inch) opened its Aqua liquidity layer to the public on Tuesday, moving the product out of the developer-only mode it had run in since November and pitching it as an alternative to the pool-based model that underpins most decentralized exchanges.
Aqua is a self-custodial system that lets liquidity providers back multiple trading positions from a single wallet balance without depositing tokens into a pool, according to 1inch.
The protocol works as a registry, meaning: a provider connects a wallet and approves a token balance, and Aqua pulls the requested tokens only when a swap order matches a position, settling the trade and fees in one atomic transaction. Otherwise, the tokens stay in the wallet, according to the team.
1inch describes Aqua as one of the first risk-controlled alternatives to the traditional pool structure. The mechanism caps a provider's exposure at the tokens actually held rather than the combined size of every position opened, and a wallet that cannot cover a swap simply is not called on.
The same balance can support several quotes at once, the protocol stated. 1inch said a $100,000 balance could back three positions collectively quoting $300,000 in liquidity, with nothing borrowed and every swap executing only against assets held in the wallet.
Alongside the launch, 1inch went live with a liquidity reward program delivered through Merkl and led by Degensoft. The 1inch Foundation committed 10 million 1INCH in provider rewards. A further 500,000 USDC from the 1inch DAO is proposed on top of that, subject to approval through a governance vote.
Limited DeFi LP model
1inch argues that the current pool model limits DeFi's ability to scale and draw traditional capital on-chain, because depositing into pools means surrendering custody while active capital thins out across protocols and price ranges.
Onchain research by Dune, commissioned by 1inch, found that roughly 85% of concentrated liquidity across major decentralized exchanges was underutilized in the first half of 2026. This figure represents about $1.6 billion of the $1.84 billion tracked.
The same study, measured a different way, put the mean share of concentrated liquidity sitting outside the active trading range at 29.5% over 26 weeks, equal to about $542 million idle in an average week across four protocols.
Aqua went live across 13 EVM chains, including Ethereum, Arbitrum, Base, BNB Chain, and Robinhood Chain. The launch also carries a liquidity leaderboard, position visualizations, batch position creation, cross-chain provider profiles, and sub-wallets.
1inch said Aqua underwent eight independent security audits from firms including OpenZeppelin, Nethermind, Hexens, and Theori. The system is designed to never holds user tokens, and revocation halts new fills once it confirms on-chain, though providers still carry market and smart-contract risk, and swap fees are not guaranteed, according to 1inch.