1inch has launched Aqua, a liquidity protocol across 13 EVM-compatible chains, allowing users to manage multiple positions with a single balance.
New protocol allows liquidity providers to manage assets more efficiently
1inch has launched its Aqua liquidity protocol on 13 Ethereum Virtual Machine (EVM)-compatible chains, enabling users to pool liquidity for multiple positions simultaneously.
The Aqua protocol allows liquidity providers to maintain their assets in personal wallets, utilizing a single balance to support various positions without the need to split capital across different pools. This means that tokens remain under the provider's control until a corresponding swap occurs.
Co-founder Sergej Kunz emphasized that, "tokens can stay in your wallet, under your control, while one balance backs multiple positions across different strategies." For example, with a $100,000 balance, users can manage three positions with a total liquidity of $300,000, though orders can only be fulfilled if the wallet balance is adequate.
Initially introduced last year, Aqua features a software development kit and allows users to set up various liquidity strategies across chains like Ethereum, Base, BNB Chain, and Arbitrum. This launch follows research indicating that a significant portion of liquidity on concentrated exchanges remains underutilized, with $542 million often inactive during trading.
To incentivize participation, 1inch has unveiled a $1.37 million liquidity program, which includes 10 million 1INCH tokens and $500,000 in USDC to be distributed over three months. This program aims to attract liquidity providers despite the inherent risks of price fluctuations and smart contract vulnerabilities.
Security measures for Aqua have been validated through eight independent audits, assuring users of its robustness. However, providers should still be cautious of potential impermanent loss and other risks associated with liquidity provision.
