1inch's Aqua Multiplies DeFi Capital Efficiency, Solving Liquidity Fragmentation

1inch, a leading decentralized finance (DeFi) ecosystem, has launched Aqua, a groundbreaking shared liquidity protocol designed to revolutionize capital efficiency in decentralized markets. The protocol, unveiled on November 17, 2025, allows multiple DeFi strategies to access the same user assets simultaneously without requiring funds to be locked in smart contracts, addressing long-standing liquidity fragmentation issues in the sector. By turning each wallet into a self-custodial automated market maker (AMM), Aqua enables strategies to pull and return liquidity atomically based on predefined rules, creating a "multiplier effect" for capital utilization.

Aqua's core innovation lies in its ability to eliminate the need for users to split or lock funds across multiple liquidity pools. Traditionally, liquidity providers have faced tough trade-offs, committing capital to single-strategy pools while sacrificing opportunity costs. With Aqua, the same assets can power multiple strategies-such as yield farming, stable swaps, or arbitrage-simultaneously, boosting returns without compromising control over funds. This approach also deepens ecosystem liquidity, enabling smaller projects to support larger, more efficient transactions.

Developers are central to Aqua's rollout. The protocol's software development kit (SDK), libraries, and documentation are now available on GitHub, allowing builders to experiment, integrate, and optimize strategies ahead of the frontend's Q1 2026 launch. To incentivize early adoption, 1inch is offering bounties of up to $100,000 for contributions, bug discoveries, and performance improvements. Developers can either build strategies from scratch or leverage SwapVM's instruction library to assemble composite strategies, streamlining the development process.

Anton Bukov, co-founder of 1inch, emphasized Aqua's potential to redefine DeFi: "Aqua solves liquidity fragmentation for market makers by multiplying effective capital. From now on, the only limit to your capital efficiency is your strategy," he stated. Co-founder Sergej Kunz added that Aqua is "the foundation for scalable, capital-efficient DeFi," comparing its significance to 1inch's 2019 aggregation protocol, which transformed token swapping.

The protocol's design prioritizes user control. Unlike traditional models requiring deposits, withdrawals, or pooling logic, Aqua allows developers to query balances directly, simplifying product development. Users retain full self-custody, with strategies accessing and returning assets instantly under granular permissions. This architecture also supports dynamic reallocation of capital without exiting locked positions, further enhancing flexibility.

1inch's Aqua initiative aligns with its broader mission to simplify DeFi for 26 million users. Beyond its aggregation engine-which processes over $500 million in daily trades-the platform offers tools like a self-custodial wallet, portfolio tracker, and crypto debit card. Recent integrations, such as Coinbase's adoption of 1inch's API and cross-chain swaps between Solana and EVM networks, underscore its expanding influence.

The launch comes as DeFi grapples with capital efficiency challenges. By enabling shared liquidity, Aqua aims to reduce competition for total value locked (TVL) among protocols while unlocking new use cases for assets-such as governance voting power and lending collateral-without requiring users to move funds. Analysts note that the protocol could catalyze a shift in how liquidity is managed, particularly as cross-chain activity grows.