1inch has officially expanded its Aqua liquidity protocol from a developer preview into a public release, enabling functionality across 13 EVM-compatible networks from day one. The launch places Aqua across a broad multi-chain landscape where professional liquidity providers and retail market participants already operate.

The protocol is built to address one of DeFi’s biggest structural challenges: fragmented liquidity distributed across separate chains and isolated trading pools. This fragmentation can leave capital inefficiently deployed, reduce potential returns, and force liquidity providers to manage assets across multiple platforms and systems.

Aqua’s Registry Model Takes a Different Approach to Liquidity

Unlike traditional automated market makers (AMMs), Aqua does not depend on standard liquidity pool deposits. Instead, it uses a registry-based allowance model that allows liquidity providers to register their wallet balances as support for multiple trading positions while keeping their assets in their own custody.

A transaction only settles when it matches the terms defined by the liquidity provider. At that point, the protocol transfers the required assets directly from the provider’s wallet to complete the swap.

The model is designed to improve capital efficiency by allowing one wallet balance to support multiple active quotes. 1inch has cited an example where a $100,000 wallet balance could back positions totaling $300,000 in quoted liquidity, although that figure represents supported order value rather than actual deployable capital.

In reality, execution remains limited by the assets available in the wallet at the time a trade is completed. Liquidity providers with smaller balances or concentrated positions may face constraints that are not reflected in the headline quote figures.

This structure differs from traditional AMMs, where users deposit funds into smart contracts and transfer control of their assets while remaining exposed to impermanent loss caused by price movements.

Aqua’s wallet-based design gives professional market makers greater flexibility by allowing them to maintain direct control over their capital. However, successful trades still depend on available counterparties and real-time on-chain balance verification during execution.

Multi-Chain Rollout and Liquidity Incentives

The public version of Aqua supports Ethereum, Arbitrum, Base, BNB Chain, Optimism, Polygon, Robinhood Chain, and other EVM-compatible networks, bringing coverage to 13 chains.

This expansion addresses a key problem in DeFi: liquidity remains divided across different ecosystems. While major networks such as Ethereum and Arbitrum have established liquidity depth, newer chains often require additional incentives to attract professional market makers.

To encourage liquidity growth, 1inch is launching an incentive program backed by 10 million 1INCH tokens from the 1inch Foundation and 500,000 USDC from the 1inch DAO.

Rewards will be distributed through Merkl and managed by Degensoft Ltd (BVI). Although the incentive package represents a significant commitment, the long-term success of the program will depend on whether it attracts sustainable liquidity or mainly draws short-term participants seeking rewards.

Aqua’s success will ultimately depend on whether its registry-based design can reduce DeFi’s liquidity fragmentation while delivering enough efficiency and flexibility to create lasting participation across multiple blockchain networks.