BlockBeats News, July 28th, according to official sources, decentralized exchange aggregator 1inch has officially launched the Aqua shared liquidity protocol to all users. Aqua allows users to simultaneously support multiple liquidity positions with just one token balance without the need to deposit assets into a liquidity pool. The assets always remain in the user's wallet, and only when the transaction is truly executed, the protocol will settle through a single atomic transaction, call the corresponding tokens from the wallet, and return the received tokens and fees to the wallet. 1inch stated that this new model, known as "shared liquidity," is expected to address issues in current DeFi such as long periods of idle liquidity, low fund utilization, and asset custody risks. The protocol was opened to developers in November last year, and is now officially launched to all users, supporting 13 EVM-compatible chains including Ethereum, Arbitrum, Avalanche, Avalanche C-Chain, Binance Smart Chain, and more.

1inch stated that the current DeFi liquidity faces several structural issues. Despite many protocols having a high Total Value Locked (TVL), a large amount of liquidity remains inactive in non-optimal price ranges, unable to earn transaction fee revenue and exposed to market volatility risks. Moreover, liquidity providers (LPs) usually need to split limited funds among different protocols, trading pairs, and price ranges, leading to decreased capital efficiency. In addition, the traditional model requires users to deposit assets into a liquidity pool, not only losing other use cases of the assets but also giving up custody rights and facing risks such as Just-In-Time (JIT) sandwich attacks where bots front-run transactions to grab fees.

Aqua allows wallet balances to be registered as a shareable liquidity source, enabling the same asset to support multiple liquidity positions simultaneously, thus improving capital efficiency without transferring asset ownership. When the wallet balance is insufficient to cover the transaction, the protocol will not execute the transaction, ensuring that the user's actual risk is always limited by the wallet holdings.