1inch (1inch) opened its Aqua liquidity layer to the public on Tuesday, moving the product out of the developer-only mode it had run in since November and pitching it as an alternative to the pool-based model that underpins most decentralized exchanges.
Aqua is a self-custodial system that lets liquidity providers back multiple trading positions from a single wallet balance without depositing tokens into a pool, according to 1inch.
The protocol works as a registry, meaning: a provider connects a wallet and approves a token balance, and Aqua pulls the requested tokens only when a swap order matches a position, settling the trade and fees in one atomic transaction.
Otherwise, the tokens stay in the wallet, according to the team. 1inch describes Aqua as one of the first risk-controlled alternatives to the traditional pool structure.
The mechanism caps a provider's exposure at the tokens actually held rather than the combined size of every position opened, and a wallet that cannot cover a swap simply is not called on.
