Dune & 1inch Study: 85% of DEX Concentrated Liquidity Was Idle in H1 2026

Scope and Methodology

The study was commissioned by 1inch and conducted by Dune Analytics. Researchers rebuilt every liquidity position across the most active pools on Uniswap v3, Uniswap v4, PancakeSwap v3, and Aerodrome Slipstream across seven blockchains, covering approximately 200 pools with ~$1.84 billion in average weekly liquidity. The analysis spanned 26 weeks (all of H1 2026).

Why So Much Liquidity Sits Idle

The study identified several key drivers of this inefficiency:

Price volatility: Concentrated liquidity positions are narrow by design. When the market price moves outside a position's range, it stops earning fees until someone manually repositions or the price returns. Persistent or volatile price action in H1 2026 frequently pushed liquidity out of range.

Automated vs. manual management: The study found that automated concentrated-liquidity management tools (e.g., automatic rebalancing bots) performed significantly better than individual wallet accounts. Individual retail LPs were far more likely to leave positions out of range, while automated managers rebalanced more frequently and kept capital active.

"Set and forget" behavior: 36.7% of the out-of-range capital had not been moved in over 90 days, suggesting widespread neglect of LP positions.

The Broader 2026 DeFi Slowdown

The Dune study landed amid a severe contraction in the broader DeFi sector, which provides important context for its findings:

• DeFi total value locked (TVL) declined every single month of 2026, falling from ~$115 billion in January to ~$70 billion by June — a 37–39% drop.
• The drawdown was driven by weaker crypto token prices, compressed yields, a risk-off rotation after the October 2025 market correction, and a wave of high-profile security exploits that cost the sector $942 million in H1 2026.
• Only two networks (TRON and Hyperliquid) saw counter-trend TVL growth during this period.

The study's findings sharpened the picture of the slowdown: even the liquidity that remained in DeFi was grossly inefficient. With 85% underutilized and nearly a third completely static, the effective "working capital" in concentrated-liquidity DEX pools was far smaller than the headline TVL numbers suggested. The $150 million-plus in foregone fees represents a direct yield cost to LPs on top of the broader capital outflows.

Key Takeaways for DeFi Participants

The study underscores that concentrated liquidity, while theoretically more capital-efficient than the constant-product AMM model it replaced, introduces new operational risks. LPs need to actively manage their positions or use automated tools to avoid leaving capital idle. For the DeFi ecosystem at large, the findings highlight that headline TVL figures can be misleading — a large portion of "locked" value may not be serving its intended purpose of facilitating trades and earning fees.