1inch's latest report reveals the serious inefficiency issues of DeFi liquidity pools, with 83% to 95% of funds on major platforms (such as Uniswap and Curve) sitting idle each year, resulting in billions of dollars of capital going unused. In Uniswap v2, only 0.5% of liquidity is active, leading to $1.8 billion in funds being ineffectively utilized, while 50% of liquidity providers face losses exceeding $60 million due to impermanent loss. 1inch co-founder Sergej Kunz has launched the Aqua protocol, aimed at addressing this 'DeFi liquidity crisis.' The Aqua protocol allows for the sharing of funds between different strategies without taking on custodial responsibilities, enabling assets to remain in users' wallets and simplifying integration for developers with decentralized exchanges (DEX).
