1inch has opened its shared liquidity layer, Aqua, to all users, approximately eight months after initially releasing a test version only to developers last November. The product currently supports 13 EVM chains and features tokens that are not pre-deposited into the pool but are instead drawn from the liquidity provider's wallet only when a trade is matched.
No need to store the pool first
Aqua is designed more like an on-chain registration layer than a traditional liquidity pool. Liquidity providers simply authorize their wallet balances by token and chain, and then create quoted positions based on these balances.
When a transaction meets the position requirements, the protocol will directly extract the corresponding tokens from the wallet upon execution and return the proceeds along with transaction fees in a lump sum. 1inch states that this authorization can be revoked at any time.
The counterparty must be verified first.
1inch states that every transaction on Aqua is executed by a "verified counterparty." These counterparties include verified market makers or arbitrage bots, and the relevant checks are performed on-chain when the transaction is executed.
The company describes Aqua as a "controlled risk" liquidity venue and says it's part of its effort to create a more controlled DeFi trading structure. Compared to last year's developer version which stated "anyone can interact with positions to complete trades," the official launch provides clearer criteria for counterparty eligibility.
1inch also stated that because each position has only a single owner, Aqua can avoid immediate fee withholding. The company claims that such attacks could erode up to 44% of a liquidity provider's fee revenue in certain scenarios.
10 million 1-inch chips for incentives
According to the example provided by 1inch, a $100,000 balance can simultaneously support three positions with a total quote size of $300,000. The protocol itself does not involve lending, and the actual transactions can only use tokens that are actually present in the wallet. Therefore, the risk exposure is still limited by the actual position size, rather than by the total quote size.
- Supported scope: 13 EVM chains
- Number of audits: 8 independent audits
- Incentive size: 10 million 1 INCH and 500,000 USDC
In terms of incentives, the 1inch Foundation has committed to providing 10 million 1INCH as a liquidity provider reward for the Aqua listing, and the 1inch DAO will also provide an additional 500,000 USDC, with the distribution completed through Merkl.
1inch also cautions that Aqua is geared towards experienced users. The product's transaction fees are not fixed, positions may be subject to adverse price movements, and liquidity providers still bear market and smart contract risks.
