New on-chain research from 1inch and Dune Analytics shows major capital inefficiencies across concentrated liquidity market makers. The study found that approximately 85% of deployed CLMM capital is currently underutilized, exposing a gap between the design promise of modern DEX infrastructure and actual liquidity-provider performance.
The analysis covered the first half of 2026 and found that an average of 29.5% of monitored capital sat entirely outside active price ranges. That out-of-range liquidity represented roughly $542 million in idle funds per week.
1/ Across H1 2026, an average of 85% of concentrated-liquidity capital was underutilized and 29.5% sat outside the active price range. That works out to roughly $542M idle in a typical week.
New onchain research from Dune, produced for @1inch. pic.twitter.com/VeI5SqEuWd
— Dune (@Dune) July 16, 2026
Idle Liquidity Weakens CLMM Efficiency
Concentrated liquidity systems are designed to make DEX capital more productive by letting users place liquidity inside specific price intervals. In practice, many LPs struggle to keep positions aligned with live market conditions.
The report estimated that LPs lose about $150 million in annual potential fee income from stagnant positions. Funds that sit outside active trading ranges do not support swaps and do not generate trading fees.
The study examined the top 200 active pools across Uniswap v3, Uniswap v4, PancakeSwap and Aerodrome Slipstream. These platforms represent some of the most important CLMM venues in decentralized finance, making the inefficiency especially relevant for market structure.
The problem is most visible in smaller accounts, where idle liquidity reaches 53% for deposits under $1,000. However, the largest dollar impact comes from wallets holding more than $1 million in liquidity positions.
Large Wallets Drive Most Dollar-Denominated Waste
Wallets with positions above $1 million account for 47% of all underutilized capital, or nearly $260 million in stagnant liquidity. That suggests inefficiency is not only a retail problem, but also a large-capital management issue.
On Uniswap v3 Ethereum mainnet, individual wallets hold 91% of total capital and generate 94% of idle funds. Automated managers and trading bots showed better performance in keeping liquidity inside active price ranges.
The data also shows a long-term management gap among LPs. About one-third of idle positions had not been adjusted for more than 90 days, reinforcing how passive strategies can undermine the intended efficiency of CLMM design.
High-volatility pairs remain a major cause of liquidity drifting out of range, but the issue is not limited to volatile assets. Around 30% of stablecoin pairs also suffered from inactive ranges, showing that even lower-volatility markets need active oversight.
The research highlights a core tradeoff in decentralized exchange design. Concentrated liquidity can create deeper markets for traders, but without automated rebalancing and better LP tooling, much of that capital remains inefficient, inactive and vulnerable to being outperformed by professional market makers.