1inch Unveils Aqua Giving Users Self Custody, Shared Liquidity

1inch recently launched Aqua protocol, a shared liquidity framework that lets users apply one set of assets to multiple DeFi strategies at the same time. It removes the need to lock funds, and it keeps tokens in the user’s wallet while strategies access liquidity through atomic execution. 

Aqua is designed to reduce liquidity fragmentation, improve capital efficiency, and simplify how both users and developers interact with decentralized finance.

What Is Aqua and How It Works

Aqua is a new protocol from the 1inch Network that allows users to share the same assets across several trading strategies without depositing those assets into separate pools. Traditionally, liquidity providers must choose a single strategy and lock their funds into a smart contract. Aqua changes that model.

Aqua tracks balance authorizations from each wallet and lets strategies pull and return assets only at the moment a trade is executed. Nothing moves unless the transaction is confirmed. This structure means users can support AMM pairs, stable swaps, or custom strategies all at once.

This shared-liquidity design connects directly to 1inch’s focus on capital efficiency. Instead of competing for total value locked (TVL), strategies now access the same capital base. For users, this reduces fragmentation. For developers, it removes deposit, withdrawal, and pooling mechanics.

Why 1inch Built Aqua

Before Aqua, liquidity was spread across many pools. A provider who held USDT, USDC, and ETH had to split funds between AMMs, stable pools, or custom strategies. Each pool required a separate deposit, and choosing one strategy meant losing potential yield from another. This created:

• Capital fragmentation
• Competition between strategies
• Higher opportunity cost
• Reduced liquidity depth
• Limited efficiency for smaller networks

Aqua reorganizes this structure by treating the wallet itself as a liquidity pool. Strategies read balances directly and execute trades atomically based on predefined rules.

Key Capabilities of the Aqua Protocol

Shared Liquidity Across Strategies

Aqua allows several strategies to use the same asset at the same time. This means liquidity providers no longer divide tokens between separate pools.

Self-Custody By Default

Funds never leave the wallet unless the user signs a transaction. Aqua is non-custodial at its core. Institutions and market makers can also use smart contracts to create shared-balance setups, but the main architecture remains self-custodial.

No Locking or Pool Deposits

There are no deposits or withdrawals. Strategies access liquidity based on wallet balances and permissions.

Atomic Execution

Aqua only moves assets when both sides of the transaction complete. This ensures safety and reduces risk exposure.

Developer Simplicity

Developers do not manage funds or write accounting logic. They query Aqua for balances and build products on top using Aqua’s SDK, libraries, and documentation.

How Shared Liquidity Works in Practice

A wallet holding USDC, USDT, and ETH can authorize all assets for several strategies at once. For example:

• A USDC–ETH concentrated liquidity position
• A USDT–ETH concentrated liquidity position
• A USDC–USDT stable swap position

Traditionally, this would require three separate pools. With Aqua, each strategy accesses the same tokens under its own rules. Even if one strategy goes out of range, others can remain active because the capital has not been locked away.

This design multiplies effective liquidity. The user deploys the same tokens across several strategies, doubling or even tripling their functional use depending on market conditions.

What Aqua Means for the DeFi Ecosystem

Aqua changes how liquidity flows across networks. Instead of each protocol fighting for deposits, strategies gain shared access to user-controlled liquidity. This helps:

• Lower fragmentation
• Improve execution quality
• Support deeper liquidity across chains
• Enable more efficient automated market making
• Raise utility per dollar of capital

Smaller networks also benefit because shared liquidity reduces the need for large TVL to support larger trades.

Developer Release and Early Access

1inch has opened Aqua to developers before releasing a public interface. Builders can start experimenting with the Aqua SDK, which includes:

• Libraries
• Full documentation
• Reference strategies
• Integration examples

Developers can also build strategies using SwapVM, a partner protocol that lets teams assemble approaches using pre-built instruction sets. 1inch is offering bounties of up to $100,000 for optimizations, performance improvements, and bug reporting during this phase.

Aqua’s Architecture and Technical Approach

Modular Strategy Design

Strategies operate independently and define their own conditions. Aqua’s accounting layer manages access, rules, and limits to ensure proper execution.

Balance Queries Instead of Deposits

Applications no longer need to handle deposit logic. Instead, they query Aqua for current balances and execute trades based on those numbers.

Atomic Liquidity Pull and Return

When a transaction is signed, strategies borrow the needed assets and return them within the same atomic operation. This ensures that funds are not at risk between steps.

Support for Multiple Strategy Types

Aqua can support:

• AMMs and concentrated liquidity models
• Stable swap algorithms
• Custom logic defined by developers
• Market-making strategies
• Cross-chain routing designs

The design aims to simplify market-making and reduce redundancy across the ecosystem.

1inch’s Broader Ecosystem and Timing

Aqua arrives as part of 1inch’s broader push to expand DeFi infrastructure. The 1inch Network already supports over 26 million users and processes more than $259 million in daily volume on Nov. 18, through its DEX aggregator.

Recent initiatives include:

• Coinbase integrating 1inch’s API to improve swap execution
• Native cross-chain swaps between Solana and EVM networks
• Expansion into routing, wallets, and liquidity tools

Aqua’s frontend is scheduled for release next year. Until then, the developer preview provides access for:

• Building new strategies
• Testing integration
• Providing feedback
• Preparing for broader adoption

The preview encourages the community to shape how shared liquidity will operate in real-world conditions.

Conclusion

Aqua is a shared liquidity framework that allows users to support multiple DeFi strategies with the same capital while keeping full custody of their assets. It reduces liquidity fragmentation, increases capital efficiency, and removes the need for deposit-based pool mechanics. For developers, Aqua provides a simpler environment for building strategies. For users, it enables flexible liquidity deployment without locking tokens.

Resources:

1. 1inch X platform: https://x.com/1inch

2. Announcement - Aqua developer release: open architecture to unlock DeFi liquidity: https://blog.1inch.com/aqua-developer-release/

3. 1inch introduces DeFi shared liquidity model 'Aqua' - report by The Block: https://www.theblock.co/post/378999/1inch-aqua

4. 1inch Unveils Protocol Letting Multiple DeFi Strategies Share the Same Capital - report by CoinDesk: https://www.coindesk.com/web3/2025/11/17/1inch-launches-aqua-a-protocol-letting-multiple-defi-strategies-share-the-same-capital