1inch's Aqua Redefines DeFi Liquidity with Shared Capital, No Lockups

1inch, a leading decentralized finance (DeFi) ecosystem, has launched Aqua, a groundbreaking shared liquidity protocol designed to address persistent fragmentation and inefficiencies in decentralized markets. The protocol, now available for developers, aims to redefine how liquidity is managed by enabling multiple strategies to access the same capital simultaneously without requiring funds to be locked in smart contracts or split across pools according to a recent report.

Aqua's core innovation lies in its ability to transform user wallets into self-custodial automated market makers (AMMs), allowing liquidity providers to apply multiple strategies to the same assets under predefined rules. This eliminates the need for traditional liquidity pools, where funds are often restricted to single strategies, creating opportunity costs and inefficiencies as research shows. By enabling atomic swaps that pull and return liquidity instantly, Aqua promises deeper market access for smaller projects while enhancing capital efficiency for users.

The protocol's developer release includes early access to its software development kit (SDK), technical libraries, and documentation, inviting builders to experiment. 1inch is offering bounties of up to $100,000 for contributions, bug discoveries, and performance improvements, incentivizing community involvement in refining the protocol before its frontend launch in Q1 2026. Developers can either build strategies from scratch or leverage the SwapVM instruction library to assemble prebuilt components, streamlining the development process according to technical documentation.

Anton Bukov, 1inch co-founder, emphasized Aqua's potential to "multiply effective capital" and position strategy design as the sole limit to liquidity efficiency according to a recent statement. He called Aqua the "hottest opportunity in DeFi," urging liquidity providers to "unleash their potential." Fellow co-founder Sergej Kunz framed Aqua as a foundational layer for "scalable, capital-efficient DeFi," drawing parallels to the team's 2019 aggregation protocol, which revolutionized token swapping as reported by industry analysts.

Aqua's benefits extend beyond developers. For end users, the protocol offers true self-custody, ensuring assets remain under control while strategies execute atomically. It also simplifies capital deployment by removing the complexities of deposit and withdrawal logic, allowing applications to query balances directly. This design addresses a critical pain point in DeFi, where liquidity providers often face trade-offs between yield opportunities and capital lock-up.

The launch follows a series of strategic advancements for 1inch, including the integration of its API into Coinbase's retail app and the introduction of cross-chain swaps between Solana and EVM networks as detailed in recent coverage. However, the platform recently faced a $5 million smart contract exploit linked to outdated Fusion v1 resolvers, prompting enhanced security measures and a bug bounty program. Aqua's development underscores 1inch's focus on innovation while addressing past vulnerabilities.

With Aqua, 1inch aims to cement its position as a cornerstone of the DeFi ecosystem. By enabling shared liquidity, the protocol could reduce competition for total value locked (TVL) among protocols and foster a more cohesive market. As the frontend approaches its 2026 launch, developers and liquidity providers are poised to test and shape the next era of decentralized finance.