DeFi’s $12B Liquidity Dilemma: Aqua Seeks to Transform Dormant Funds into Active Power

Bitget App

Trade smarter

Bitget

News

Markets

DeFi’s $12B Liquidity Dilemma: Aqua Seeks to Transform Dormant Funds into Active Power

Bitget-RWA2025/11/22 16:26

By:Bitget-RWA

- DeFi faces $12B liquidity crisis with 95% capital idle due to blockchain fragmentation. - 1inch's Aqua protocol enables shared liquidity, turning wallets into self-custodial AMMs to boost capital efficiency. - Aqua's $100K bug bounties and SDK aim to refine infrastructure as DeFi borrowing hits $41B in Q3 2025. - Critics highlight DeFi's fragmentation barriers, but proponents see Aqua replicating 2019 aggregation success. - 1INCH token's $0.207 breakout could signal optimism about resolving the liquidity

Recent industry research reveals that decentralized finance (DeFi) is grappling with a $12 billion liquidity shortfall, with 95% of funds remaining unused due to fragmentation among various protocols and blockchains. This challenge has driven new developments, such as 1inch's introduction of Aqua—a shared liquidity protocol designed to transform capital deployment in DeFi. The platform's co-founder Anton Bukov

characterized Aqua as a way

to significantly increase capital effectiveness by letting several strategies tap into the same tokens without locking up assets.

Launched in November 2025, Aqua provides developers with access to a unified liquidity layer through an early-access SDK, libraries, and guides

according to the official statement

. Unlike conventional systems that require users to divide or lock their assets in specific pools,

Aqua enables each wallet to function as a self-custodial AMM

, allowing multiple strategies to be executed at once. This innovation removes the need for liquidity providers to pick between competing pools,

lowering opportunity costs and enhancing capital utilization

. The protocol also offers bug bounty incentives of up to $100,000 to encourage developers to improve its framework

as noted by BeInCrypto

The necessity for such advancements is highlighted by the unprecedented leverage in DeFi.

Galaxy Digital shared that crypto-backed borrowing jumped

to $73.6 billion in the third quarter of 2025, with DeFi lending alone reaching $41 billion. On-chain lending now makes up 66.9% of all crypto borrowing, fueled by incentives and new chains like Plasma. Yet, this expansion brings risks,

as shown by a $21.68 million liquidation incident

on November 22, when a major DeFi participant lost 700

WBTC

following a

Bitcoin

price drop.

Investors are monitoring the 1inch token (1INCH) as an indicator of sector sentiment.

The token held steady around $0.187

at the end of November, with blockchain data pointing to increased whale transactions and favorable funding rates. Experts observed that if

1INCH

surpasses $0.207, it may aim for $0.234, reflecting growing optimism about Aqua’s ability to solve liquidity issues

as predicted by analysts

While critics maintain that DeFi’s fragmented landscape still hinders widespread adoption, supporters such as 1inch co-founder Sergej Kunz argue

Aqua has the potential to mirror the success

of the platform’s 2019 aggregation protocol. By deepening liquidity across different projects, even smaller protocols could handle larger trades, promoting a more unified DeFi environment

as previously highlighted

The sector’s current phase marks a pivotal moment: as leverage and borrowing hit new highs, solutions like Aqua seek to activate dormant capital. The future of DeFi may depend on whether shared liquidity frameworks can resolve the industry’s liquidity dilemma or if it will continue to struggle with underused assets.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops

Lock your assets and earn 10%+ APR

Lock now!

- Ripple's XRP ETFs see $128M inflows and regulatory approvals, but prices drop amid market correction. - XRPI and XRPR ETFs fall 8%, while XRPC ETF generates $58.5M in first-day trading, surpassing Solana's debut. - SEC approvals confirm XRP's commodity status, boosting institutional confidence as nine new XRP ETFs target $4B–$8B inflows. - Technical analysis shows XRP-USD above $2.00, with analysts projecting $2.50 by late 2025 if ETF AUM exceeds $8B.

Bitget-RWA•2025/11/24 11:44

XRP News Today: XRP ETF Investments See $4 Billion Influx Amid Price Drop: Market Adjusts After Recent Surge

San Francisco Hotel Promotions and Autonomous Taxis Indicate Economic Recovery

- San Francisco's hotel market shows recovery as Newbond and Conversant buy two iconic hotels for $408M, signaling investor confidence amid rising convention bookings. - Tech innovation accelerates with Amazon's Zoox launching free robotaxi trials, competing with Waymo and Tesla in autonomous vehicle testing. - Deutsche Bank raises capital via a 7.125% AT1 bond and revises ESG targets to include 900B€ in transition finance by 2030, reflecting industry decarbonization trends.

Bitget-RWA•2025/11/24 11:44

San Francisco Hotel Promotions and Autonomous Taxis Indicate Economic Recovery

TWT's Revamped Tokenomics: Redefining Value for Holders and Ensuring Long-Term Project Viability

- TWT rebranded as Toncoin in 2025, shifting to gamified utility via Trust Premium, emphasizing user engagement and gas discounts. - A 2020 token burn reduced supply by 40%, but liquidity risks persist due to pre-burn circulation and centralized utility dependencies. - Lessons from TNSR's collapse highlight the need for decentralized use cases, as TWT's value relies on recurring incentives and cross-chain liquidity. - Analysts project TWT could reach $15 by 2030, contingent on sustained adoption and addres

Bitget-RWA•2025/11/24 11:44

TWT's Revamped Tokenomics: Redefining Value for Holders and Ensuring Long-Term Project Viability

Cardano News Today: Blockchain Dispute: Should Those Responsible for Chain Splits Face Legal Action or Should Open-Source Creativity Be Safeguarded?

- Solana co-founder Anatoly Yakovenko praised Cardano's swift recovery from a November 2025 chain split, calling its resilience "pretty cool" despite a malicious transaction exploiting a deserialization bug. - Cardano's Ouroboros consensus model enabled rapid convergence without hard forks, preserving transaction throughput and avoiding fund losses through emergency node upgrades. - A public debate emerged between Yakovenko and Cardano founder Charles Hoskinson over legal accountability, with Hoskinson adv

Bitget-RWA•2025/11/24 11:28