1inch Launches Aqua, Its Shared Liquidity Layer for All Users

1inch Launches Aqua for All Users

1inch has officially launched Aqua, its shared liquidity layer for decentralized finance (DeFi), making it accessible to all users on 13 EVM-compatible chains after an initial eight-month period limited to developers. The launch took place on a Tuesday and includes major platforms like Ethereum, Arbitrum, Base, BNB Chain, and Robinhood Chain.

Aqua is designed to be a scalable and capital-efficient solution for DeFi, functioning more like a registry than a conventional liquidity pool. In this model, liquidity providers approve a token balance and establish positions that draw from it, with tokens being transferred only upon the completion of a swap. This method allows for enhanced control and easy revocation of approvals specific to each token and chain.

“Liquidity providers: it’s time to wake up. Utilize 1inch Aqua to discover heightened activity across more markets while retaining custody of your tokens.”

— 1inch (@1inch)

Each transaction on Aqua is facilitated by a verified counterparty, which includes market makers or arbitrage bots that have undergone authentication, ensuring a risk-controlled environment. This verification process occurs on-chain during the swap, marking Aqua as a pioneer in regulated liquidity venues within the DeFi landscape. Previously available only to developers, Aqua was introduced in November with the promise that any user could engage in swaps.

The protocol also aims to protect liquidity providers from just-in-time fee skimming, which could diminish their income by up to 44%. For example, a provider with a balance of $100,000 can support three positions totaling $300,000 without any borrowing, limiting exposure to actual holdings instead of the total value of positions.

To celebrate Aqua's launch, the 1inch Foundation has set aside 10 million 1INCH tokens as rewards for liquidity providers, alongside an additional 500,000 USDC from the 1inch DAO to be distributed via Merkl. Aqua has completed eight independent audits from firms such as OpenZeppelin and Nethermind, although 1inch warns that the platform is intended for experienced users due to the inherent risks associated with fees and market fluctuations.