DeFi has spent years optimizing AMM curves, charge fashions and routing logic, but one elementary difficulty has remained largely untouched: most liquidity in automated market makers doesn’t really work. The vast majority of capital deposited into swimming pools sits unused, fragmented throughout dozens of pairs and protocols. At Devconnect Buenos Aires, 1inch unveiled Aqua, a protocol designed to problem that limitation straight.
As a substitute of locking property into separate swimming pools, Aqua allows a single pockets stability to assist a number of methods concurrently. It introduces a shared-liquidity structure that would reshape how capital effectivity and yield technology operate throughout the ecosystem. With builders, researchers and protocol builders gathered in Buenos Aires, the timing was deliberate.
On this interview, we converse with Sergej Kunz, co-founder of 1inch, about what Aqua is, the way it works, and why it represents one of the important shifts in liquidity design since 1inch launched aggregation in 2019.
Interview
Why did you select Devconnect Buenos Aires because the second to introduce Aqua?
Sergej Kunz:
Devconnect gathers a technical viewers that understands what goes into constructing and securing a protocol. Aqua wants precisely that degree of scrutiny. Presenting it right here permits us to speak on to builders, researchers, and safety consultants who can problem the mannequin, check it and finally construct on it.The selection is smart. Aqua isn’t a advertising and marketing product ; it’s infrastructure, and Devconnect is likely one of the few occasions the place infrastructure launches really land with the proper crowd.
For readers who haven’t adopted the announcement carefully: what’s Aqua? And why this strategy?
Sergej Kunz:
Aqua addresses a core downside in DeFi: round 80 to 90 % of capital sitting in liquidity swimming pools isn’t really working. It’s there to assist the AMM curve, nevertheless it doesn’t actively generate worth. With Aqua, customers don’t should lock property in separate swimming pools. Belongings keep within the pockets and might assist a number of methods on the identical time. Consider it as a digital DEX engine operating inside your pockets, whereas remaining totally self-custodial.In different phrases, Aqua modifications the idea that liquidity should be fragmented throughout dozens of swimming pools. It lets one stability behave like a number of with out compromising safety.
So how does that translate into larger capital effectivity?
Sergej Kunz:
With conventional AMMs, if you wish to assist a number of buying and selling pairs, you divide your liquidity into a number of buckets. That reduces utilization. With Aqua, the total quantity of an asset can work throughout a number of AIMM methods in parallel. The result’s larger liquidity depth and considerably larger yield. Our backtests present returns growing 5 occasions or extra, and shared liquidity can push that impact as much as fifteen occasions in comparison with legacy AMMs.That is the place Aqua turns into greater than a conceptual enchancment: it straight impacts LP earnings.
Who’s Aqua meant for at this stage?
Sergej Kunz:
Proper now, this launch is for builders, safety consultants and researchers. They’re those who will probe the protocol. When the manufacturing model goes dwell, it is going to goal liquidity suppliers who need larger yield with much less fragmentation.
What was the response like at Devconnect?
Sergej Kunz:
The group right here is extraordinarily engaged. Many builders visited the sales space wanting to know how one liquidity place can function throughout a number of methods. Even very technical attendees have been stunned this strategy hadn’t been carried out earlier than. Their suggestions already helped us sharpen how we clarify Aqua forward of my upcoming speak.The engagement reveals that shared liquidity remains to be unfamiliar territory but additionally that the demand for a extra environment friendly mannequin is evident.
Is there something similar to Aqua in at the moment’s market?
Sergej Kunz:
No. It is a new architectural mannequin in DeFi. In 2019, 1inch solved fragmentation for takers with aggregation. Aqua solves fragmentation for makers, the liquidity suppliers. Some initiatives explored comparable concepts, however nobody delivered a working shared-liquidity system with such easy integration. Builders can use it with only a few traces of code.
What ought to the ecosystem count on from 1inch going into 2026?
Sergej Kunz:
This 12 months was intense. We launched Solana assist for intent-based swaps, rolled out cross-chain capabilities and rebranded to replicate our shift towards serving not solely Web3 but additionally conventional firms. We imagine each future enterprise will depend on Web3 infrastructure the identical means each fashionable enterprise depends on the web. Aqua’s full manufacturing launch is deliberate for the top of this 12 months or early subsequent 12 months, together with an interface and third-party builders already getting ready integrations. And sure, there are further protocols within the pipeline.
What’s your key takeaway from Devconnect this 12 months?
Sergej Kunz:
Many groups imagine they compete with one another, however in actuality we construct totally different items of the identical infrastructure. A number of builders approached us involved that Aqua would possibly disrupt their work. My message to everyone seems to be that we’re all companions. If we give attention to fixing foundational issues, the ecosystem turns into simpler to make use of for conventional industries as properly.
Conclusion
Aqua marks a significant shift in how DeFi thinks about liquidity design. For years, protocols have competed on curve optimizations, charges and routing mechanisms whereas quietly accepting that almost all liquidity sits inactive. By introducing a shared-liquidity structure that permits one stability to serve a number of methods, 1inch is pushing the dialog towards a extra environment friendly and extra composable future.
The timing is notable. Because the business strikes deeper into intent-based execution, cross-chain liquidity and institutional-grade infrastructure, the necessity for capital to work more durable and never simply sit untouched turns into more and more clear. Aqua suits straight into that transition. It provides builders a brand new primitive to construct on and offers liquidity suppliers a mannequin that aligns yield with precise utilization as an alternative of fragmentation.
Whether or not Aqua turns into a brand new customary will depend upon how briskly the ecosystem adopts it, how builders combine it and the way the manufacturing model performs as soon as dwell. However one factor is definite: introducing a protocol that rewrites the assumptions of AMM liquidity on the finish of 2025 units the tone for a really totally different 2026. If 1inch delivers on the roadmap Sergej outlines, Aqua may affect not simply particular person protocols however the underlying structure of DeFi itself.