1inch Aqua launch opens shared liquidity layer to public
1inch opened Aqua to all users on 13 EVM chains, letting liquidity providers approve wallet balances instead of depositing tokens.
By Theo Nakamura · Staff Writer
· 3 min read
The 1inch Aqua launch gives DeFi users a new way to provide liquidity without first sending tokens into a pooled contract. For everyday crypto investors, the point is capital efficiency: 1inch says the same wallet balance can back multiple trading positions, while tokens move only if a swap actually happens.
1inch said Aqua went live to the public on Tuesday across 13 EVM chains, eight months after the protocol was first made available to developers. EVM chains are blockchains that can run Ethereum-style smart contracts. 1inch named Ethereum, Arbitrum, Base, BNB Chain and Robinhood Chain among the supported networks.
The public release adds a user-facing front end after an earlier developer-only period. According to 1inch, that front end had initially been planned for the first quarter.
What is 1inch Aqua?
Aqua is 1inch’s shared liquidity layer for DeFi, short for decentralized finance, which means blockchain-based financial apps that run through smart contracts instead of traditional intermediaries. 1inch describes Aqua as infrastructure for more scalable and capital-efficient DeFi because it lets different positions reference the same tokens in a user’s wallet.
The key difference from a standard liquidity pool is custody. In many DeFi venues, a liquidity provider deposits tokens into a pool, and trades happen against that pooled balance. With Aqua, 1inch says the provider approves a token balance from a wallet and creates positions tied to that approved balance.
Tokens are not placed into a contract ahead of time, according to 1inch. If a swap meets the terms of a position, Aqua pulls the needed tokens and returns the resulting proceeds and fees in the same transaction. Those approvals are set by token and by chain, and 1inch says users can revoke them.
How Aqua changes liquidity management
1inch gives the example of a $100,000 wallet balance used to support three positions quoting a combined $300,000. The company says that does not mean the user has borrowed funds or taken on $300,000 of direct exposure, because any swap can only use tokens actually held in the wallet.
That structure is meant to reduce the need for liquidity providers to split funds across several pools or lock the same asset into separate strategies. For traders, deeper or more flexible liquidity can matter because it may affect whether a swap fills and how efficiently it executes.
1inch also says every Aqua swap must be handled by a verified counterparty. The company defines that as a verified market maker or arbitrage bot, with the check enforced on-chain when the swap takes place. A market maker provides buy and sell quotes, while an arbitrage bot looks for price differences between venues.
1inch calls Aqua the first “risk-controlled liquidity venue” and said it fits into a broader move toward “risk-controlled and regulated DeFi.” When Aqua first reached developers in November, 1inch said anyone could interact with a position to execute a swap.
The company also says Aqua’s position design addresses just-in-time fee skimming, a practice where an actor briefly inserts liquidity to capture fees around a trade. According to 1inch, each position has a single owner, which it says can make the cost of such attacks as high as 44% of a provider’s fee income.
This story draws on original reporting from Decrypt.
