1inch has launched Aqua, a self-custodial shared liquidity layer for DeFi, backed by a Merkl-powered incentive programme.
The launch follows a developer release in November 2025 and positions the protocol as an alternative to the pool-based liquidity model that underpins most decentralised exchanges (DEXs). Aqua has gone live across 13 EVM-compatible chains from day one, including Ethereum, Arbitrum, Base, Robinhood Chain, and BNB Chain.
How the shared liquidity model works
Aqua operates as a registry rather than a pool. A user connects a wallet and approves a token balance, then creates one or more liquidity positions that draw on that balance. When the protocol receives a swap order matching a position's parameters, it pulls the required tokens from the wallet and returns the swapped tokens and fees in a single atomic transaction. If no matching order arrives, the tokens remain in the user's wallet under their control. This structure allows a single balance to back several positions simultaneously; 1inch cites an example in which a USD 100.000 balance could support three positions collectively quoting USD 300.000 of liquidity. In addition, positions can be full range, concentrated or pegged, and providers can open or close them without a lock-up period, with exposure limited to the tokens actually held in the wallet.
Alongside the launch, 1inch introduced 1inch Network Incentives, a liquidity reward programme for Aqua delivered through Merkl and led by Degensoft Ltd, a British Virgin Islands-registered entity. The 1inch Foundation has allocated ten million 1INCH tokens to provider rewards, supplemented by a 500.000 USDC contribution from the 1inch DAO. The programme is intended to support liquidity growth and swap activity across supported trading pairs, with terms and safeguards published in 1inch's campaign configuration.
1inch commissioned on-chain research from Dune to quantify inefficiencies in the existing pool-based model. The analysis found that 85% of concentrated liquidity across major DEXs was underutilised in the first half of 2026, equivalent to roughly USD 1.6 billion of the USD 1.84 billion tracked. An estimated USD 542 million sat entirely out of range in an average week, resulting in an estimated USD 150 million in foregone fees annually. 1inch positions Aqua as a response to this gap, arguing that pool-based provisioning requires providers to hand over custody while spreading capital thinly across protocols and price ranges.
Security audits and risk factors
Aqua has undergone eight independent security audits, conducted by OpenZeppelin, Bailsec, Hashlock, Hexens, MixBytes, Nethermind, Theori, and Decurity. Because each position has a single owner, 1inch states the design removes the shared fee moment that bots typically exploit in just-in-time (JIT) fee sniping. The company notes that swap fees are not guaranteed, that impermanent loss remains possible, and that providers bear market and smart-contract risk. Additional features accompanying the launch include a liquidity leaderboard, an incentives dashboard, liquidity map visualisations, batch position creation, cross-chain provider profiles, sub-wallets, and an AI-assisted provisioning flow via the 1inch Business MCP, described as coming soon.
