About 54% of liquidity for positions below $1,000 was out of reach, compared to 26% for positions above $1 million. Yet positions worth more than $1 million accounted for 47% of all unused capital, or about $260 million.
While contract-managed positions remained in a more consistent range, individual wallets accounted for between 82% and 94% of the allocated idle capital on Uniswap v3, depending on the channel. This suggests that liquidity deposited directly by users and requiring manual adjustments is more likely to remain unattended and fall out of reach.
Dune estimates that these out-of-scope providers, who remain inactive, could miss out on about $150 million in fees each year, based on a blended fee APR in the ~35% range.
Liquidity providers deposit token pairs that decentralized exchanges use to conduct trades. They earn a share of the fees paid for trades using this liquidity pool as long as their positions stay within the range they set.
However, research indicates that this figure does not guarantee recoverable income. Maintaining active positions can add transaction costs, execution risk and exposure to adverse price movements.
1inch commissioned the research ahead of the planned launch of Aqua, a new liquidity protocol. Dune said it developed the methodology and reached its conclusions independently.
