Dune and 1inch research reveals 85% of DeFi liquidity is underutilized, with concentrated-liquidity LPs missing $185–195M annually in fees due to out-of-range positions.
DeFi & Yields ·
Research by Dune and 1inch examining roughly $1.84 billion in pooled capital across four venues and seven chains over 26 weeks found that 85% of decentralized finance liquidity sits underutilized at any given moment, equating to as much as $1.6 billion earning no fees and providing no market depth. As of June 30, 2026, concentrated-liquidity positions that were fully out of range represented $580–590 million of idle capital, with an average of 29.5% of such capital in that state across the study period.
Liquidity providers holding out-of-range positions in concentrated-liquidity pools forego an estimated $185–195 million annually in fees they would otherwise collect. The research underscores a structural inefficiency in how DeFi liquidity is deployed, with 1inch's co-founder stating that providers are leaving billions in underutilized capital and millions in fees due to the current model.
The full report remains the primary source for the findings. It is not yet clear whether proposed solutions to improve capital efficiency will gain industry adoption or materially reduce the scale of unutilized liquidity in practice.