1inch Unveils Aqua, a Risk-Controlled Alternative to DeFi's Traditional Pool-Based Model
1inch, a leading DeFi ecosystem, has announced the full public launch of Aqua, a self-custodial shared liquidity layer. This new system enables liquidity providers to use the same wallet balance across multiple positions without locking assets in liquidity pools.
Aqua is designed as a risk-controlled alternative to DeFi's traditional pool-based model. It allows users to create liquidity positions that can access a single token balance, eliminating the need for asset splitting and lock-ups. According to 1inch, this approach makes it easier for liquidity providers to manage their assets and respond to market demands.
The Aqua protocol tracks user balances in real-time and executes swap orders when conditions are met. This means that users can keep full control over their tokens and exposure is capped by the actual balance held in the wallet. If a swap cannot be executed, the user's tokens remain untouched.
Alongside the product launch, 1inch has introduced a liquidity reward program for Aqua, led by Degensoft Ltd (BVI) and delivered through Merkl. The 1inch Foundation has committed 10 million 1INCH in provider rewards, while 500k USDC comes from the 1inch DAO.
According to 1inch, the current pool-based system is a major limiting factor on DeFi's ability to scale and bring TradFi capital onto the chain. Per Dune research commissioned by 1inch, around 85% of concentrated liquidity across major DEXs was underutilized in H1 2026, totaling roughly $1.6 billion.
Aqua has undergone eight independent security audits conducted by OpenZeppelin, Bailsec, Hashlock, Hexens, MixBytes, Nethermind, Theori, and Decurity. The system's design ensures that exposure is bounded and providers retain control over their tokens, but swap fees are not guaranteed, prices can move against a position (impermanent loss), and providers bear market and smart-contract risk.