Study Finds 85% of Concentrated Liquidity Idle on DEXs in 2026

A recent onchain analysis conducted by Dune, commissioned by the DEX aggregator 1inch, shows that a significant portion of liquidity in decentralized exchanges remains idle. The study estimates that, on average, 85% of concentrated liquidity capital was not actively engaged during the first half of 2026. Notably, 29.5% of this capital was entirely outside of active trading ranges, meaning it was not generating fees or contributing to market efficiency.

This underutilization points to potential inefficiencies in liquidity provisioning strategies across multiple chains. The findings suggest that a large share of liquidity providers may be holding assets in positions that do not optimize fee income or market stability.

The study's insights are driven by the increasing complexity of liquidity management in DeFi, where providers often allocate funds based on predictive models or automated strategies. The high percentage of idle capital indicates room for protocol improvements or new tools to better align liquidity with active trading ranges.

While the analysis covers seven different chains, the implications are clear: optimizing liquidity ranges could enhance fee revenue for providers and improve overall market efficiency. Protocols may need to develop more dynamic or adaptive liquidity management solutions to address these inefficiencies.

This research underscores ongoing challenges in DeFi related to capital efficiency and could influence future developments in liquidity provisioning tools and strategies, ultimately impacting the ecosystem's robustness and user experience.