Dune Study for 1inch Finds 85% of Concentrated Liquidity Idle

Idle Capital Percentage

85%

Percentage of concentrated liquidity capital that is idle across decentralized exchanges.

Annual Missed Fees

$150M

Estimated fees that out-of-range liquidity providers forgo each year due to idleness.

Total Value Locked (TVL)

$1.84B

Average total value locked across the 200 most active pools analyzed in the study.

§ 01 Executive Snapshot

What: A Dune study commissioned by 1inch reveals that 85% of concentrated liquidity across decentralized exchanges is idle.
Who: Dune Analytics, 1inch, decentralized exchanges like Uniswap v3 and PancakeSwap v3.
Why it matters: This underutilization indicates significant inefficiencies in DeFi capital deployment, with potential revenue losses for liquidity providers.

An average of 85% of concentrated liquidity capital was found to be idle in the first half of 2026.
Approximately 29.5% of this capital, equating to around $542M, was fully outside the active price range.
Out-of-range liquidity providers miss out on about $150M annually in fees due to idleness.

The study highlights the challenges of concentrated liquidity, where providers deposit capital into specific price bands, leading to idle assets when prices drift out of range.
Dune's analysis spans approximately $1.84B in total value locked (TVL) across 200 active pools, indicating a substantial market for liquidity optimization.

The findings suggest immediate market consequences, as liquidity providers may need to reassess their strategies to enhance capital efficiency.
Long-term, this could lead to innovations in liquidity management tools and strategies to mitigate idleness in DeFi markets.

Potential risks include regulatory scrutiny over liquidity management practices and the inherent volatility of asset pairs that contribute to idleness.
Infrastructure dependencies on automated managers and bots may limit individual liquidity providers' ability to optimize their positions effectively.

Future studies or reports that measure changes in capital efficiency or the development of new liquidity management tools will be critical.
Monitoring the evolution of liquidity strategies on platforms like Uniswap and PancakeSwap will signal the effectiveness of responses to the identified inefficiencies.

§ 07

What does the Dune study commissioned by 1inch reveal?

The study reveals that 85% of concentrated liquidity across decentralized exchanges is idle.

Why is the idleness of concentrated liquidity significant?

This underutilization indicates significant inefficiencies in DeFi capital deployment, leading to potential revenue losses for liquidity providers.

How much capital was found to be fully outside the active price range?

Approximately 29.5% of the concentrated liquidity capital, equating to around $542M, was fully outside the active price range.

What are the potential risks associated with idle liquidity?

Potential risks include regulatory scrutiny over liquidity management practices and the volatility of asset pairs that contribute to idleness.