Aqua, The First Shared Liquidity and the Next Leap in DeFi: A Conversation with 1inch Co-founder Sergej Kunz

DeFi has spent years optimizing AMM curves, charge fashions and routing logic, but one basic situation has remained largely untouched: most liquidity in automated market makers doesn’t truly work. The 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 immediately.

Instead of locking belongings into separate swimming pools, Aqua permits a single pockets steadiness to help a number of methods concurrently. It introduces a shared-liquidity structure that might 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.

In this interview, we converse with Sergej Kunz, co-founder of 1inch, about what Aqua is, the way it works, and why it represents certainly one of the most important shifts in liquidity design since 1inch launched aggregation in 2019.

Interview

Why did you select Devconnect Buenos Aires as 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, take a look at it and finally construct on it.

The alternative is smart. Aqua isn’t a advertising and marketing product ; it’s infrastructure, and Devconnect is certainly one of the few occasions the place infrastructure launches actually land with the proper crowd.

For readers who haven’t adopted the announcement intently: what’s Aqua? And why this method?

Sergej Kunz:
Aqua addresses a core drawback in DeFi: round 80 to 90 p.c of capital sitting in liquidity swimming pools isn’t truly working. It’s there to help the AMM curve, however it doesn’t actively generate worth. With Aqua, customers don’t need to lock belongings in separate swimming pools. Assets keep in the pockets and can help a number of methods at the similar time. Think of it as a digital DEX engine working inside your pockets, whereas remaining totally self-custodial.

In different phrases, Aqua modifications the assumption that liquidity should be fragmented throughout dozens of swimming pools. It lets one steadiness 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 help a number of buying and selling pairs, you divide your liquidity into a number of buckets. That reduces utilization. With Aqua, the full 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 rising 5 instances or extra, and shared liquidity can push that impact as much as fifteen instances in comparison with legacy AMMs.

This is the place Aqua turns into greater than a conceptual enchancment: it immediately impacts LP earnings.

Who is Aqua supposed for at this stage?

Sergej Kunz:
Right now, this launch is for builders, safety consultants and researchers. They’re the ones who will probe the protocol. When the manufacturing model goes stay, it would 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 method hadn’t been applied 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 in addition that the demand for a extra environment friendly mannequin is evident.

Is there something akin to Aqua in immediately’s market?

Sergej Kunz:
No. This is a brand new architectural mannequin in DeFi. In 2019, 1inch solved fragmentation for takers with aggregation. Aqua solves fragmentation for makers, the liquidity suppliers. Some tasks explored comparable concepts, however nobody delivered a working shared-liquidity system with such easy integration. Developers can use it with only a few strains of code.

What ought to the ecosystem anticipate from 1inch going into 2026?

Sergej Kunz:
This yr was intense. We launched Solana help for intent-based swaps, rolled out cross-chain capabilities and rebranded to replicate our shift towards serving not solely Web3 but in addition conventional corporations. We consider each future enterprise will depend on Web3 infrastructure the similar method each fashionable enterprise depends on the web. Aqua’s full manufacturing launch is deliberate for the finish of this yr or early subsequent yr, alongside with an interface and third-party builders already making ready integrations. And sure, there are extra protocols in the pipeline.

What is your key takeaway from Devconnect this yr?

Sergej Kunz:
Many groups consider they compete with one another, however in actuality we construct totally different items of the similar infrastructure. Several 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 effectively.

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 steadiness to serve a number of methods, 1inch is pushing the dialog towards a extra environment friendly and extra composable future.

The timing is notable. As the trade strikes deeper into intent-based execution, cross-chain liquidity and institutional-grade infrastructure, the want for capital to work more durable and not simply sit untouched turns into more and more clear. Aqua suits immediately into that transition. It provides builders a brand new primitive to construct on and provides liquidity suppliers a mannequin that aligns yield with precise utilization as an alternative of fragmentation.

Whether Aqua turns into a brand new customary will rely upon how briskly the ecosystem adopts it, how builders combine it and how the manufacturing model performs as soon as stay. But one factor is definite: introducing a protocol that rewrites the assumptions of AMM liquidity at the finish of 2025 units the tone for a really totally different 2026. If 1inch delivers on the roadmap Sergej outlines, Aqua might affect not simply particular person protocols however the underlying structure of DeFi itself.

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