1inch is set to introduce a new kind of shared liquidity protocol with the 1inch Aqua launch. It aims to put an end to some of the longstanding inefficiencies in DeFi and offer a better way of doing things for everyone, from institutional players to retail traders.
Addressing DeFi Liquidity Pool Inefficiencies
Kunz, 1inch’s co-founder, made it clear on Unchained that there is a lot at stake here. He has had his own experiences as a liquidity provider and says Aqua is meant to be the answer to the headaches he has encountered. The numbers back it up: according to one study, 85% of what you see in concentrated liquidity goes unused over the course of a year. That is the sort of problem 1inch is out to remedy.
Then there is the matter of how it works. With Aqua, a provider can put together fairly sophisticated strategies, setting their own terms and conditions. There is no need to go into debt or juggle assets in different pools as you would with the conventional approach. It is a simpler process that should make for better use of capital.
Professional Market Makers and Broad Network Launch
What sets the 1inch Aqua launch apart is the way it has put its faith in a select group of professional market makers, all of whom have to be approved by the 1inch team. As was mentioned on Unchained, these are the ones making the trades in Aqua happen, with the goal of providing more reliable order execution and better liquidity than you would find in a typical peer-to-peer setup.
The introduction of Aqua was no half-measure; it went live on 13 Ethereum-compatible chains at once, from Arbitrum to Optimism. The thinking is that a wide launch like this will put as much liquidity on the table as possible right from the start, and in turn, draw in DeFi participants who are looking for something more than what the current patchwork of pools has to offer.
Incentives and Access for All Trader Types
In the wake of the Aqua release, 1inch has put an incentive plan in place to get liquidity moving. It’s a way for those in early — whether token holders or providers of capital — to participate and be rewarded with USDC or through Merkle tree distributions.
As the 1inch team put it to Unchained, the idea with Aqua is to have something that works for everyone, from institutional players to retail traders. You won’t find the usual roadblocks here; with the tools on offer, it is meant to be a straightforward DeFi option for all.
Source — Unchained: https://www.youtube.com/watch?v=6hEsGl2K4nQ
Explore how the shared liquidity innovations like 1inch Aqua can empower your trading strategies with a funded crypto account. funded crypto trading accounts.