About $1.6 billion in liquidity deposited across major decentralized exchanges (DEXs) was not being used to its full potential during the first half of 2026, according to new research. The figure represents 85% of the $1.84 billion tracked across concentrated liquidity pools on Uniswap, PancakeSwap, and Aerodrome, according to research by analytics firm Dune commissioned by decentralized exchange aggregator 1inch.

What Is Idle Liquidity and Why Does It Matter?

Concentrated liquidity pools let providers place assets within a chosen price range. The capital supports more trading and collects more fees while the market stays within that range; once the price moves beyond it, the position stops working until the provider adjusts the range or the market returns to it. Think of it like setting up a currency exchange booth that only operates within a specific price band. If the market moves outside that band, your booth closes down and stops earning fees.

Roughly $542 million, or 29.5%, sat fully out of range in an average week. The money had not left the decentralized finance (DeFi) ecosystem. It was priced so high that traders could not use it. For example, a position in an ETH/USDC pool set between $2,000 and $2,500 stops earning fees if the price of ETH moves outside that band. The provider must set a new range or wait for the market to return to it.

How Much Money Are Liquidity Providers Actually Missing?

Dune estimated that out-of-range providers sitting idle could be missing roughly $150 million in fees each year, based on a blended in-range fee annual percentage rate (APR) of about 35%. However, the research noted that this figure is not guaranteed recoverable income. Keeping positions active can add transaction costs, execution risk, and exposure to unfavorable price movements.

"Decentralized exchanges have grown into one of the deepest, most liquid markets in crypto. What our research shows is that it has reached this scale even though much of its liquidity is not yet fully at work," said Filippo Armani, research lead at Dune.

Filippo Armani, Research Lead at Dune

Who Is Most Affected by Idle Liquidity?

The research revealed a striking pattern: individual wallet holders are far more likely to leave their liquidity sitting idle than automated systems. Individual wallets accounted for between 82% and 94% of the attributed idle capital on Uniswap v3, depending on the blockchain, suggesting that liquidity deposited directly by users and requiring manual adjustments is more likely to go unattended and fall out of range.

Larger positions are usually less likely to sit idle, but the research found that those pools of money still held most of the inactive capital. Around 54% of liquidity in positions below $1,000 was out of range, compared with 26% for positions above $1 million. Yet positions worth more than $1 million accounted for 47% of all idle capital, or roughly $260 million.

Steps to Understanding Liquidity Provider Risk Factors

• Price Movement Direction: The study linked idle liquidity more closely to price movements than to volatility. A steady price move in one direction is more likely to strand capital than a volatile week that ended near where it began.
• Position Size and Automation: Contract-managed positions stayed within a more consistent range, while individual wallets accounted for the vast majority of idle capital, indicating that manual management is less reliable than automated systems.
• Market Conditions and Timing: The out-of-range share stayed mostly between 25% and 35% throughout the study period, rising to nearly 41% in early February when bitcoin price crashed from around $90,000 to $60,000.

Dune tracked Uniswap v3 and v4, PancakeSwap v3, and Aerodrome Slipstream across seven blockchains using weekly snapshots from January 6 to June 30, 2026. The findings come as retail platforms bring more users and traditional assets onchain and financial firms expand their work on tokenized funds and blockchain-based settlement.

1inch argues that idle liquidity will become more costly as markets grow, more capital will be stranded, and more trading fees will go unearned as liquidity becomes thinner. The research was commissioned ahead of the planned launch of Aqua, a new liquidity protocol from 1inch, though Dune stated it developed the methodology and reached its conclusions independently.