Aqua Launches: 1inch's New Protocol for Efficient Liquidity Provision

DeFi protocol 1inch has launched Aqua, a new decentralized finance (DeFi) protocol designed to improve capital efficiency for liquidity providers.

Aqua enables users to keep their assets in their own wallets while making them available across multiple DeFi trading opportunities. The protocol functions as a registry rather than a pool, allowing users to approve token balances held in their own wallets and making those assets available for multiple quoted positions.

This model aims to improve capital efficiency by limiting providers' exposure to the assets they already hold. For example, US$100,000 in assets can simultaneously back US$300,000 worth of quoted liquidity, although only the tokens held in the wallet can be used to settle trades.

To encourage adoption, the 1inch Foundation has allocated 10 million 1INCH tokens for liquidity rewards, with an additional proposal for 500,000 USDC through the 1inch DAO. Aqua has also completed eight independent security audits.