TL;DR
- A study commissioned by 1inch to Dune reveals that 85% of concentrated liquidity in DEXs remains unused at any given moment.
- Of the $1.84 billion tracked, approximately $542 million is completely out of range every week, representing losses of between $185 and $195 million annually in fees, according to 1inch.
- Liquidity providers with positions above $1 million concentrate 47% of idle capital, demonstrating that the problem is not limited to small users.
1inch commissioned on-chain analytics platform Dune to conduct a study on the effective use of concentrated liquidity in decentralized exchanges, and the results reveal a structural problem of considerable proportions: 85% of that capital remains idle at any given moment. Of the $1.84 billion tracked, approximately $1.6 billion is not generating fees or executing trades.
Structural Deficiencies
The study analyzed four protocols with concentrated liquidity—Uniswap v3, Uniswap v4, PancakeSwap v3, and Aerodrome Slipstream—over 26 weeks, between January 6 and June 30, 2026, across seven networks: Ethereum, Base, Arbitrum, BNB Chain, Unichain, Polygon, and Optimism. Dune took weekly snapshots of between 559 and 776 pools selected from those with the highest trading volume in the previous 30 days.
Don't get caught in the inefficiency of old liquidity design.
$1.6 billion in DeFi liquidity sits underutilized right now, according to research from 1inch and @dune. As institutional capital and tokenized assets move onchain, fixing this becomes the difference between growth… pic.twitter.com/Vzm2th0wRh
— 1inch (@1inch) July 22, 2026
The concentrated liquidity model allows providers to choose specific price ranges where their capital becomes available for trading. When the price exits that range, the position stops participating in transactions and stops accruing fees. On average, 29.5% of capital was completely out of range during the analyzed period, reaching peaks of nearly 41% in early February.
1inch Reveals the Real Cost of Idle Liquidity
According to 1inch, the estimated losses from this phenomenon range between $185 and $195 million annually in uncollected fees, calculated by applying a 40% return rate on out-of-range capital. The figure is even more striking when considering that positions above $1 million—far from being the most efficient—concentrate 47% of idle capital, equivalent to approximately $260 million.
The determining factor turned out not to be market volatility, but rather the sustained direction of price movement. A consistent move in a single direction pushes more capital out of range than an intense but transient fluctuation.
Sergej Kunz, co-founder of 1inch, noted that the industry is leaving billions of dollars sitting idle and anticipated the launch of Aqua, a solution aimed at maximizing capital utilization for liquidity providers. Filippo Armani, Research Lead at Dune, underscored that DEXs have reached their current scale despite operating with a large share of their liquidity sitting idle, and projected that substantial improvements will follow as efficiency increases and institutional capital continues to flow into the ecosystem.
