About 85% of concentrated liquidity across decentralized exchanges is not doing the work it was deposited to do, according to research by onchain analytics platform Dune commissioned by 1inch.
The study rebuilt every liquidity position in roughly the top 200 pools by activity on Uniswap v3, Uniswap v4, PancakeSwap v3, and Aerodrome Slipstream, taking 26 weekly snapshots across seven chains between Jan. 6 and June 30. It covered about $1.84 billion in liquidity on average per week, approximately $1.6 billion of which was underutilized at any given time.
Concentrated liquidity, introduced with Uniswap v3, lets a liquidity provider set the price band their capital covers rather than spreading it across every possible price. It was designed to offer an improvement on the constant-product venues it replaced.
As a comparison, Dune found roughly 98.7% of liquidity on constant-product AMMs sits outside the day's traded band.
Out of range is only the floor
