Here is why a massive $1.6 billion in crypto liquidity is sitting idle and wasting away
Research by Dune Analytics reveals that $1.6 billion in liquidity across major decentralized exchanges remains idle because it is priced outside of active trading ranges. This inefficiency results in lost trading fees and suggests that capital management in DeFi needs to evolve as markets grow.
Why it matters
As decentralized finance matures, the inability to efficiently utilize liquidity poses a scalability challenge for institutional and retail participants.
The figure represents 85% of the $1.84 billion tracked across concentrated liquidity pools on Uniswap, PancakeSwap and Aerodrome, according to research by analytics firm Dune commissioned by decentralized exchange aggregator 1inch.
Roughly $542 million, or 29.5%, sat fully out of range in an average week. The money had not left the decentralized finance ecosystem. It was priced so high that traders could not use it.
The findings come as retail platforms bring more users and traditional assets onchain and financial firms expand their work on tokenized funds and blockchain-based settlement. 1inch argues that idle liquidity will become more costly as markets grow, more capital will be stranded, and more trading fees will go unearned as liquidity becomes thinner.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in