1inch Introduces Shared Liquidity to Improve DeFi Capital Efficiency
Shared liquidity is a new approach in decentralized finance (DeFi) aimed at improving the efficiency of asset usage for trading. The concept, implemented by 1inch through its Aqua platform, allows users to support multiple liquidity positions with the same token balance without having to split and deposit their assets into separate pools. Traditional automated market maker (AMM) models require liquidity providers to divide capital among different protocols or price ranges, often leading to underutilized funds. According to 1inch's research, around 85% of concentrated liquidity in DeFi is idle on any given day. Aqua addresses this by enabling users to reference the same token balance across multiple positions from their own wallet. Aqua operates as a registry where tokens remain in the user’s control and are only transferred during swaps. This reduces protocol custody risk while maintaining exposure to market and smart contract risks typical of DeFi platforms.
Topics: 1inch Aqua Decentralized Finance (DeFi) Shared Liquidity