Study Finds More Than $1.6 Billion in DeFi Liquidity Sat Idle in First Half of 2026

Liquidity provision is fundamental to decentralized finance, directly shaping trading efficiency and market depth on decentralized exchanges. As automated market maker mechanisms have evolved, however, efficient capital allocation has emerged as an industry challenge. Liquidity that remains idle for extended periods sharply reduces returns for liquidity providers and undermines the resilience and trading experience of the broader cryptocurrency market.

According to research released in July 2026 by data analytics platform Dune and decentralized exchange aggregator 1inch, as much as $1.6 billion, or about 85%, of liquidity on major decentralized exchanges sat idle in the first half of 2026. The study found that about $542 million each week failed to earn fees because market prices moved outside the specified ranges.