Decentralized exchange aggregator 1inch has unveiled Aqua, a liquidity protocol allowing multiple DeFi strategies to share the same capital base without compromising user custody. The shared liquidity layer enables capital from a single wallet to back several trading strategies simultaneously, addressing fragmentation issues that have constrained capital efficiency across decentralized finance.
Developers gained access to Aqua's software development kit, libraries, and documentation on GitHub following the announcement at Devconnect in Argentina on Monday. The full front-end interface will launch in early 2026, according to the company. 1inch is offering bounties up to $100,000 for contributions, bug discovery, and performance improvements during the developer preview period.
Aqua's Innovative Architecture
Traditional DeFi models force liquidity providers to choose between single-strategy pools and locked positions that limit flexibility. Aqua's architecture allows assets to remain in user wallets while strategies tap into them only when trades execute. Liquidity providers can authorize tokens for multiple strategies like automated market makers, stable swap pools, or custom logic simultaneously, with each strategy operating under distinct rules and access limits tracked by Aqua's accounting system.
Co-founder Anton Bukov stated Aqua solves liquidity fragmentation by multiplying effective capital, removing the only limit to capital efficiency beyond strategy design. Fellow co-founder Sergej Kunz characterized the protocol as foundational infrastructure for capital-efficient DeFi, comparing it to the team's 2019 aggregation work. The model transforms each wallet into a self-custodial automated market maker where strategies pull and return liquidity atomically under predefined rules.
The shared liquidity approach improves both capital efficiency, measuring how much liquidity one wallet can provide, and utility efficiency, determining how many DeFi roles the same capital can fulfill simultaneously. Users can provide liquidity, vote in governance, or post collateral on lending platforms without locking funds in specific contracts. This design could double or triple effective liquidity depending on configuration.
Developer Access and Focus
Developers can create strategies from scratch or use SwapVM instruction libraries to assemble new channels. The protocol removes deposit and withdrawal logic entirely, with applications querying balances rather than managing funds. This architecture lets builders focus on strategy design rather than pool mechanics while end users maintain capital efficiency without surrendering custody.
1inch Ecosystem and Recent Developments
1inch operates one of the largest DeFi ecosystems, facilitating low-cost token swaps for over 26 million users with daily trading volume exceeding $500 million. The platform offers DEX aggregation, self-custodial wallet services, portfolio tools, business routing infrastructure, and integrations across major EVM and non-EVM networks. The company ranks as the second-largest DEX aggregator on Ethereum by market share.
Coinbase integrated 1inch's API earlier this year to improve swap execution in its retail application. The project also introduced native cross-chain swaps between Solana and EVM networks, reducing friction for multichain movement. An upgraded Pathfinder routing algorithm delivers improved swap rates across hundreds of pools and liquidity sources.
Aqua's Impact on DeFi and Traditional Finance Convergence
Aqua's release follows growing institutional interest in DeFi infrastructure capable of handling regulated financial instruments. The protocol aims to converge traditional finance and crypto-native ecosystems by enabling capital to flow efficiently across strategies without custody tradeoffs. 1inch characterized the launch as crucial DeFi infrastructure built to tackle capital fragmentation constraining the Ethereum ecosystem and compatible networks.