1inch Launches Aqua: Market Making Without Assets Leaving Wallet, Same Funds Can Be Used for Multiple Trading Pairs

Author: 1inch

Compiled by: TechFlow

TechFlow Editor's Note: The old problem with DeFi liquidity provision is having to deposit tokens into pools, split them into different positions, and having fees snatched by JIT bots. 1inch Aqua lets you support multiple market-making positions with the same funds simultaneously, assets stay in your own wallet, transferring only at the moment of execution, worth attention for LPs who want to improve capital efficiency without giving up custody rights.

Figure: 1inch Aqua main visual—The same token balance supports multiple market-making positions simultaneously under self-custody. Source: 1inch

DeFi liquidity is not user-friendly. Most tokens in most pools do nothing most of the time. You bear the risk, but don't get the returns DeFi promises. 1inch Aqua is here to solve this problem.

Now you can support multiple liquidity positions with the same token balance, without depositing assets into pools, tokens stay safely in your wallet, and no trading fees will be snatched by JIT attacks.

This means assets can stay active across multiple markets and positions simultaneously from a single balance, rather than being split into fragmented positions.

We call this approach Shared Liquidity.

Last November we released this protocol to developers. Now, 1inch Aqua is open to all users at 1inch.com/aqua.

Liquidity Problems

Most DeFi liquidity is idle most of the time. A protocol may show high TVL, but only part of the liquidity is useful when trades actually occur. Liquidity might be outside the active price range, earning no fees, while still bearing market volatility risk.

Even when there is trading activity, LP liquidity is fragmented. They must split limited balances across different protocols, trading pairs, and price ranges. No single position gets support from the full balance, reducing capital efficiency.

Worse still: tokens deposited into pools leave the LP's wallet, meaning loss of other uses for these tokens, plus all the security and control issues that come after giving up custody rights.

Additionally, LP tokens are subject to JIT (Just-In-Time) bot attacks, where these bots snatch fees that should have been earned by the LP.

1inch Aqua solves all these problems.

What is 1inch Aqua

1inch Aqua is a self-custodied shared liquidity layer. It keeps your liquidity active across multiple positions while tokens stay in your wallet.

It operates as a registry: users connect wallets to approve a token balance, creating liquidity positions that can use this balance. The Aqua protocol tracks this balance, when it receives trade orders matching position criteria, it pulls requested tokens from the wallet, pushing back received tokens and fees in a single atomic transaction.

Otherwise, user funds stay in the wallet, fully controlled by the user. Tokens are not deposited into Aqua or any other contract. They stay in your wallet, moving only when a trader's swap executes against the position.

How Aqua Works

1inch Aqua lets you create positions by selecting trading pairs, price ranges, and swap fees. Depending on the selected trading pair and position type, positions can be full-range, concentrated, or pegged. You can open and close positions yourself, with no lock-up period.

Your risk exposure is limited by the tokens you actually hold, not the theoretical total size of each position you create. If your wallet cannot cover a swap, Aqua will not call your funds.

Starting today, you can create positions on 13 EVM chains, including Ethereum, Arbitrum, Base, Robinhood Chain, and BNB Chain.

Why Shared Liquidity Matters

1inch Aqua changes how you think about liquidity provision. In the traditional model, providing liquidity usually means splitting tokens across multiple pools and positions. This reduces capital efficiency.

With Aqua, the same wallet balance can support multiple positions. This gives you better capital efficiency and more flexibility.

This is especially important in the multi-chain DeFi market, where liquidity is scattered across different venues, networks, and trade flows.

Self-Custody by Design

1inch Aqua is built around self-custody. You don't deposit tokens into pools. You don't give custody rights to Aqua. Your tokens stay in the wallet until a swap executes.

Approvals are handled per token and chain, and can be revoked. Your actual risk exposure remains limited by wallet balance.

This is important because liquidity provision usually requires LPs to transfer tokens into specific pools or contracts. 1inch Aqua brings you closer to a wallet-native DeFi model: keep your keys, keep your tokens, choose your positions.

Risk-Controlled Liquidity

We are rapidly moving towards risk-controlled and regulated DeFi. Aqua is the first risk-controlled liquidity venue, where every swap is settled by verified counterparties, while you maintain full self-custody of tokens.

Why is Aqua liquidity risk-controlled? Every swap is executed by verified counterparties—market makers or arbitrage bots are verified and enforced on-chain during the swap. Therefore, LPs are not exposed to unverified counterparties.

The product itself has been audited by 8 independent teams, including Hexens, OpenZeppelin, Bailsec, and Nethermind.

JIT Protection

Aqua liquidity is designed to prevent JIT fee snatching. In ordinary pool AMMs, JIT bots can insert liquidity before large swaps, then immediately withdraw, snatching fees that should have been earned by waiting LPs. Due to JIT attacks, LPs may lose up to 44% of fee income. Aqua positions have only one owner, making it impossible for JIT bots to execute this attack.

The Future of Liquidity

DeFi needs more than just more liquidity. It needs more risk-controlled and useful liquidity—liquidity that can stay active where demand arises. 1inch Aqua is designed to achieve this.

Disclaimer: Aqua involves risks, including loss of funds. It is built for experienced users—please do your own research. Does not constitute financial advice.

Activate your DeFi liquidity with 1inch Aqua.