A study by on-chain analytics platform Dune, commissioned by 1inch, found that about 85% of concentrated liquidity on decentralized exchanges is not being used as intended at the time it was deposited. The research said an average of $542 million each week sits completely outside its fee-earning range, leaving that capital inactive from a fee-generation standpoint. According to the study, liquidity providers whose positions are out of range lose roughly $150 million in fees per year. It also found that more than one-third of the idle capital has remained unused for more than 90 days. The findings were cited by The Block and point to persistent inefficiency in how concentrated liquidity is deployed across DeFi trading venues.
On-chain analytics platform Dune, in a study commissioned by 1inch, said about 85% of concentrated liquidity on decentralized exchanges is not being used for the purpose it was deposited for.
The research said an average of $542 million per week sits fully outside its fee-earning range.
Under that framework, liquidity providers with out-of-range positions are losing about $150 million in fees each year, while more than one-third of the idle capital has gone unused for longer than 90 days.
The report was cited by The Block.
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