Unchained - Paid Partnership: How Can DeFi Fix Its Liquidity Problem? 1inch's Aqua Offers a Solution

Episode Date: July 28, 2026

SPONSORED CONTENT: This video is a paid partnership with 1inch. It was produced in collaboration with 1inch and is separate from Unchained's editorial coverage. 1inch cofounder Sergej Kunz says up to 85% of DeFi's liquidity sits idle. He walks through Aqua, the self-custodial product built to put that capital back to work. ======================================================== Thank you to our sponsor! ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠1inch - Swap crypto at the best rates in DeFi with 1inch — and get an early look at Aqua, their new protocol that lets your liquidity do more than one job at a time https://1inch.io  ======================================================== Discover Aqua, their new shared-liquidity protocol that lets your capital power multiple DeFi strategies at once — without leaving your wallet. Learn more at https://1inch.io 1inch co-founder Sergej Kunz says he built Aqua after getting sandwiched by MEV bots while providing his own liquidity, and after 1inch's research found up to 85% of concentrated liquidity across DeFi sits idle. Kunz walks through why he thinks liquidity pools fragment capital by design, and how Aqua's intent-based, self-custody model tries to fix that without asking users to give up control of their assets. He covers Aqua's sub-wallet structure, how professional market makers settle trades after passing 1inch's compliance and KYB checks, and the rollout across 13 networks including Base and Robinhood's chain. Kunz also details 1inch DAO's plan to distribute USDC to liquidity providers. Host: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠André Beganski - Host Guests: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Sergej Kunz - Cofounder of 1inch Timestamps 📣 00:19 Swap crypto at the best rates in DeFi with 1inch — and get an early look at Aqua, their new protocol that lets your liquidity do more than one job at a time https://1inch.io  💧 00:40 Sergej on getting sandwiched, and why 85% of DeFi liquidity sits idle 🔬 06:15 Why Sergej says every chain shares Aqua's idle-liquidity flaw 🧩 07:16 Sub wallets: how Aqua runs positions without creating debt 🛡️ 12:10 Why 1inch keeps Aqua self custody, and the risks Sergej flags 🏦 13:24 Who Aqua is built for, and how it isolates sanctioned funds 💰 17:03 Aqua's 13 networks and the $500K DAO incentive program Learn more about your ad choices. Visit megaphone.fm/adchoices

Institutions who want to provide liquidity in a specific environment, like maybe Robin Hood chain, and maybe even A other blaze, they don't want to mix own funds with other people funds, right? Because there's also some hackers and maybe sanctioned people. And your cool house is isolated. You are with own position. The settlement on Aqua is done by professional market makers for passing specific compliance checks from a one-inch compliance team. and also passing through KYB. Hi, everyone. Welcome to a special Unchayed Paid Partnership interview.

My name is Andro Baganski, and I'm here today with One Inch co-founder Sergey Coons to discuss Aqua, a shared liquidity WIO for DFI that just debuted across 13 networks. Welcome, Sergey. Hi, everyone. It's a pleasure to be here. Heads up, everyone. This conversation is sponsored content, paid for by 1-inch. It's produced in partnership with them, separate from Unchained,

Newsroom. One inch is one of Ethereum's most prominent decentralized exchange aggregators, and today you launched Aqua, a product that is meant to offer an alternative to Defi's traditional pool-based model. What problem were you trying to solve for users with Aqua? So actually solved my own problem. I faced multiple times problems in the use of liquidity pools. I provide some liquidity and I played around with the maximum acceptable price impact.

And somehow I forgot to reset it. And I got sandwiched by providing liquidity and lost like 10 Ethereum or something. Kind of it's attackable by math bots. It's kind of a problem. Additional problem with I face as liquidity provider as well are the adjusting time equity provisionings from math bots. So when you sit in the pool, and there a big trade is coming to the pool. And there's a math board jumping in into the liquidity pool before the trade with a lot of money. And after the trade, it removes the liquidity.

So you don't get almost anything from the swap. The fact that you get diluted with sitting with the others in the liquidity pool with the piece would are defined by Unisvote team. You know, like you can only choose 30 bibs, five bibs, one beep, you know, one percentage. But, you know, if you do proper analysis of the market and we did deep research of it, one of it we reported together with June,

where we are highlighted that 85 percentages of liquidity sits actually idle. It's participating in the price formation, but actually it doesn't move at all in like 95% of the time in a year. So, and we were thinking like, like, how we can address all these problems. We did already long research from 2021.

When we introduced limit orders, we built some strategies for limit orders, what allowed you to sell in, in, in, in, in one direction, for example. But somehow we, we didn't, continue to work on that, but I think right now it's the right time for this approach, since we have much more liquidity, also from institutions coming in with RAAs, and this demand for more efficient on higher utilization of liquidity. So we came to the idea, okay, like, we are very

good in intents. We have our intent-based swaps. We have the intent-based cross-chairs. highly atomically and non-custody. And then we thought, like, why not to make liquidity provision also based on in plans? And this is at the end kind of just like a strategy. You define a strategy, you say, okay, I'm okay to buy this asset until this price,

and I'm okay to sell it until this price. And I want to charge specific amount of fee. And how much you should charge, it should not be gut filling. Yeah? It should be based on the historical data based on the trend and based on the market situation. The market situation can change. So you should be able to close all your positions with one single transaction. Such things

are possible to do on ACWA. We have a benefit that you don't need to distribute your liquidity into different pools. If you look into unit swap, if you have like 10,000 USDC and you want to provide liquidity, you need to split it. If it's only one pool, you have to split it by half to disperse, USDC, Ethereum, maybe. And then if you want to provide UZC to WBTC, you cannot. You need to reduce your amount what you put in the pool.

Your liquidity gets very fragmented. In our protocol, you can just keep your assets in the wallet. you have all the benefits, for example, you can participate in uniswap governance with your unit token because they are only wallet. In the same time, you can have a position for Uni-Ethier in a specific price range and moves. Like if you look in your history of data,

what we provide in our interface, you see what happened like in the last six months with the price, how it moved. And then you can set your price range in the right manner so you stay in the range and are always and can also utilize the utility of the token. There are some other really nice solutions as well for looping. Looping on AviV3, I love it very much. Today I built out of my position three to four time leverage with like just same assets.

Like you can deposit WBTC, for example, in AVE. You can borrow CBBTC and you can deposit again. And you can just loop it multiple times. And then you have like 3 to 4X. And then you put aqua position on that, just on AVE tokens. All the arbitrage traders and market makers who are participating in Monash Network after passing KYB and compliance check from a team, they can settle it.

And they are okay with settling in Avetopens. You know, it's kind of, they don't need to. These are not like a retail user or something. These are professionals who know how to do that. So you get trades, you know, and you made out of your 10K, you can make 30 to 40K. It means you could earn three to four times more fees. So this is the idea kind of like aqua.

Sergey, I appreciate the overview, and there's some details that you just mentioned that we're going to dig into now and later in the segment. First off, you mentioned this research that was commissioned by Dune showing that 85% of concentrated liquidity was underutilized this year. Is this an ecosystem-wide issue? And why do you think it's the case? Yeah, it's like on every chain the same because they used the same design. smart contract custody you need to put into smart contract your assets and the assets are isolated so and cannot be shared so and actually this shared liquidity approach becomes more famous i would say today i have seen that last week uniswap launched the dual pull hack hook hook hook So what is the collaboration with the Spark?

And it's kind of useful as the shared liquidity approach. So it's very nice to see that what we launched in November last year as a developer release of Aqua, now getting adoption also by Uniswop team. So, yeah, the design of shared liquidity allows you to utilize on the same assets in multiple positions in the same time. It's kind of really beautiful.

and increase your utilization. You know, you talk about that idea, multiple positions sort of happening at the same time. Can you talk about how that's able to happen without the creation of debt or anything like that? Yeah, just, you have just normal wallet. One big thing what we also introduced with this aqua release is the, I call them stop wallet. You know, like you have a wallet, you have maybe like 20K in a wallet, but you don't want to risk full amount of your assets, right? So on your okay, only to gamble with gamble, yeah. With 10K, you can create a sub-wallat.

And sub-wallet in the form of Gnosis safe, you can add it if you are already in the Gnosis safe, or you just create one if a beautiful address even. You can just mine your beautiful Gnosis-safe address. kind of thing that I wipe code it in my free time. So, yeah, and then you can isolate your assets in a sub-wallet. It's almost as multi-sick. And then it's like normal wallet on one inch. So, and then you can, you have your different assets. You have maybe like six assets.

And then you can create among all six assets trade combinations, like trading strategies. It's like virtual M-M pools, but there are only kind of, virtual and these are just only allowance for market makers to trade on your assets based on specific conditions. It's like a trading bot, what you run on a wallet, and the rules are written in smart contract. And it works 24-7 and you don't even to run a computer for that. You know, you talk about this from the perspective of how it could potentially or is meant to

benefit users. And I'm just curious, like, how do you think this product could affect Ethereum's ecosystem at large? I think it will affect the VATRI space in general. You see the adoption of RDAs. Robin Hood launched on a layer two based on Arbitrum technology, right? And they have, other ways, Binance have RDAQ, Omblayers, Ondo, X stocks. So, and, and, And this is kind of a problem of lack of liquidity. Of course, there are market makers who are integrated in one inch, in 10 best swamps, who are offering to mint on demand RDAs.

But there is no kind of secondary market, and it's kind of difficult to build it because there's a small amount of liquidity. So this secondary market can be built by a user itself, like I as a person can just buy all the RDAs. And the beauty of R2AAS is compared to the blue chips or Ethereum Bitcoin, blue chips and Ethereum and the Bitcoin moving in the same direction at the same time. Sometimes they move maybe slower, but they come than back, you know, and it's like moving like this.

All the prices are safe, up, down, up, down. Artemis, they're all different, right? So, Nvidia goes up, SpaceX goes up, something goes down, and this energy between this price movements, you can catch by taking these out of place, putting on your wallet, creating IPA strategies among them, and you can earn on the volume what goes through the ecosystem of this blockchain. Well, I would love it if you could just describe how Aqua actually prices and executes transactions compared to what you see with classic AMMs. Yeah, so Aqua is not executing anything. Aqua is just intent-based protocol for liquidity provisioning.

You define what strategy you want to create. For example, you have some Ethereum, you have some USDC, and you would like to create the trading strategy. for a specific price range, you are okay to buy Ethereum if it drops up to 15 percentages, and you are okay to sell Ethereum until $12,000 where we will see Ethereum very soon. So not financial advice, of course. Another component I wanted to ask you about is why was this product designed in a way that prioritized self-custody? Everything what we built is self-custody at one age.

So there's no service what is custody at all. and even we try to work with the wallets to introduce clear signing, is what we did for later, if you have seen the announcements. So clear signing is when you get into the transaction on your wallet, you exactly understand what you are doing. For example, you are creating position on Accra in specific price range, on a specific current market rate, and specific fees what you're charging.

and the amount you choose. So, yeah. Do you feel like there's any risks worth highlighting when it comes to Aqua or just the idea of providing liquidity in Defi at large? For sure, there are some risks like everywhere. And to address this, exactly, we launched under 1 inch Aqua,

one inch.com slash ACO slash learn. It's a learn page where you can search. If you have a question, you can see what strategies are there, considerate liquidity, full range of liquidity, packed formula for stable coin pairs. So there are some explanation. What reason do you have as someone who use these strategies? So, of course, everyone should educate themselves, understand really what you're doing, yeah?

what impact could happen. And of course, from the protocol side, kind of we did maximum effort as a core contributor team with a lot of security audits. We have eight security audits. It cost a huge amount of money. We were lucky that we got funded for the security audits from the DAO. So Dow now kind of helped to bootstrap the protocol itself.

so you were able to launch it. Awesome. Shifting gears a little bit, you know, you've seen a lot of innovation in the crypto's face when it comes to building applications that are both consumer-facing and those meant for institutions, especially regarding ease of use and compliance. Who was Aqua Men for? Actually, for me, for myself. That's why I spend a lot of time to.

to work on that, to improve that, and we're lucky to have this great team where we shipped everything all together. So there's like no way on one man show. It's always a team effort with all these specialists. We have started to build it for ourselves, same as with other protocols, like Cross Transforce, for example. where it was kind of difficult to bridge, you know, like the security programs with the bridges.

I think like last week, again, two more bridges got hacked. And here we used our standard approach, what we are doing at one age. We built everything institutional radio. It's like, you know, this time we are, the TV brands started to publish the TVs with HD radio or something, you know, we are, we are institutional radio. So we put a level on top of it and we, and we fulfill also what we promise here. It's institutional ready in the form that institutionsals who want to provide liquidity in a specific environment, like maybe Robin Hood chain and maybe even other blaze,

they don't want to mix own funds with other people's funds, right? because there's also some hackers and maybe sanctioned people. And your cool house is isolated. You are with own position. And the settlement on Aqua is done by professional market makers who are passing specific compliance checks from a one-inch compliance team and also passing through KYB. So it's clear who is behind the settlements.

so even the institutions can say, okay, I'm only okay if Intermute settles. And they can define it by themselves. At the top of the show, you mentioned how Aqua debuted across 13 different networks that are Ethereum compatible. I know you've talked about Robin Hood chain on this show, but which other ones stand up to you? So we support everything what's there kind of, what's famous. and have users base, of course, one of our institutional partners.

We are infrastructure provider as well for Coinbase. So we serve them with three APIs. And we are moving a little bit into AI direction with AI aggregation and providing all the AI services. Yeah, so of course, all the arbitrum, optimism, Zika Sync, Binance smart chain, Polygon. We work with everyone because it's the way where we can benefit altogether. And aside from capital efficiency, what incentives or rewards programs are you rolling out

alongside Aqua to attract that initial liquidity? Yeah. So for Aquaflaunch, One-ish Foundation introduced an incentive program through Merkel distribution. So people can get some rewards by creating positions and generating volumes on these positions. We have specifically the board in Aqua. So you see yourself and you see other people and you see the positions of other people. So you can look like how they generate actually money and you can just do kind of copy trading. And I personally introduce the 3D visualization as a kind of 3D map in a form of molecules.

And pipes, what are the positions between the tokens? So you can better discover and understand, oh, I actually forgot to create between these two tokens, one more position so I can share the same assets in these two or three positions in the same time so and you can actually tweet on X.com with a small small banner of your positions also kind of nice thing so additional program we got from one inch dollars well one inch dollars distributing 500,000 use DC in the next three months to people who generate swole on Aqua. That's interesting.

By creating positions, by being maker, by creating Aqua trading strategies, positions, and junior team or less. Sure. Is there anything else that we didn't cover during this interview that you feel like is worth highlighting, potentially some of the technical nuance when it comes to Aqua or anything that you're particularly excited about? Yeah. In terms of like technical topics, look into Aqua.

learn. We tried our best. We have even tutorials with videos where you can see how to connect the wallet for really new people, how to create position. We have even audio. You can just sit in here like a podcast over like what is jit and why is this a problem in our web space. Yeah. And And developer documentation, of course, for developers. We have built it not just only for one-inch network itself or the institutionsals, what we serve and also expand our direction to institutionsals, to board them as infrastructure provider, also for developers. So you can, as a developer, you can build a vault where you use the shared liquidity

Aqua positions. So you could generate much more than you can just compare to other MMs where you isolate liquidity and it's idle for 85%. So it's open for developers and everyone is welcome to Bill on top of it. Well, it was nice speaking to you about Defy and Aqua today, Sergey. Thank you so much for joining us. This has been a paid partnership interview sponsored by One Inch. Keep an eye out for future ones and I'll see you the next time.

This video was a paid partnership. Any statements about the featured company or its products are its own and have not been independently verified by unchained. Nothing in this video is investment, financial, legal, or tax advice, or a recommendation to buy, sell, or use any asset or product discussed. Always do your own research before making any financial decision.