1inch Commits 10M 1INCH, 500k USDC to Aqua LP Rewards

1inch launched its Aqua liquidity protocol to the public on July 28, backing the release with a rewards program funded with 10 million 1INCH from the 1inch Foundation and 500,000 USDC from the 1inch DAO, the company said.

The program, called 1inch Network Incentives, is delivered through incentive platform Merkl and led by Degensoft Ltd, a British Virgin Islands entity. It is designed to drive liquidity and swap activity across supported pairs on Aqua, which went live on 13 EVM chains including Ethereum, Arbitrum, Base, BNB Chain and Robinhood Chain, following a developer-only launch in November 2025.

Shared Liquidity Layer

Aqua is a self-custodial shared liquidity layer: instead of depositing tokens into pools, a liquidity provider approves a wallet balance that multiple positions can quote against. When a swap order matches a position, the protocol pulls the tokens from the wallet and pushes back the received tokens and fees in one atomic transaction. Until that moment, the tokens stay in the provider's wallet.

The design lets the same balance back several quotes at once — $100,000 in a wallet can support three positions collectively quoting $300,000, with execution capped by what the wallet actually holds. Positions can be full range, concentrated or pegged, with no lock-ups.

"The liquidity provisioning space is broken, but you only see how broken once there's an alternative," said 1inch co-founder Sergej Kunz in the announcement. "With Aqua, liquidity providers no longer have to accept the inefficient pool structure they've put up with for years."

Case Against Pools

1inch is aiming the launch at what it says is widespread waste in DEX liquidity. Per onchain research by Dune commissioned by 1inch, 85% of concentrated liquidity across major DEXs sat underutilized in the first half of 2026 — roughly $1.6 billion of the $1.84 billion tracked — including about $542 million fully out of range in an average week, for an estimated $150 million in foregone fees per year.

Aqua has been through eight independent audits, by OpenZeppelin, Bailsec, Hashlock, Hexens, MixBytes, Nethermind, Theori and Decurity. Providers still bear market and smart-contract risk, and swap fees are not guaranteed; the design bounds exposure to tokens actually held, and single-owner positions remove the shared fee event that just-in-time liquidity bots exploit in pooled AMMs.

Incentives Programs

Incentive programs funded in native tokens are DeFi's standard playbook for bootstrapping liquidity, and they tend to buy volume only as long as emissions last. The more consequential test is whether Aqua's registry model — quoting from wallets rather than locking capital in pools — retains providers once the 10 million 1INCH runs out. If capital efficiency claims hold, professional market makers get pool-level reach without custody handoff, which is the audience 1inch needs to win over from established AMMs.