1inch-commissioned research reveals 85% of concentrated DeFi liquidity sits underutilized, representing $150M in foregone annual fees.
DeFi & Yields ·
Research commissioned by 1inch and conducted on Dune found that 85% of concentrated liquidity in decentralized finance remains underutilized. This inefficiency translates to approximately $150 million in annual fees that liquidity providers forego each year.
Concentrated liquidity—capital deployed within narrow price ranges rather than across the entire curve—has become a common strategy in modern decentralized exchanges. However, the research suggests that the majority of deployed concentrated positions fail to capture available trading activity, leaving significant revenue on the table.
The findings highlight a structural gap between how liquidity is positioned and where actual trades occur. What remains unclear is whether this underutilization stems from poor positioning by liquidity providers, insufficient incentive mechanisms to concentrate capital more effectively, or broader market conditions that prevent concentrated positions from achieving active trading ranges.