DeFi users are missing out on $150 million a year. Here’s why

Around 54% of liquidity in positions below $1,000 was out of range, compared with 26% for positions above $1 million. Yet positions worth more than $1 million accounted for 47% of all idle capital, or roughly $260 million.

While contract-managed positions stayed within a more consistent range, individual wallets accounted for between 82% and 94% of the attributed idle capital on Uniswap v3, depending on the chain. That suggests liquidity deposited directly by users and requiring manual adjustments is more likely to go unattended and fall out of range.

Dune estimated that these out-of-range providers, that are sitting idle, could be missing roughly $150 million in fees each year, based on a blended in-range fee APR of about 35%.

Liquidity providers deposit token pairs that decentralized exchanges use to complete swaps. They earn a share of the fees paid for trades using that liquidity pool while their positions remain in the range they set.

However, the research said that the figure is not guaranteed recoverable income. Keeping positions active can add transaction costs, execution risk and exposure to unfavorable price movements.

1inch commissioned the research ahead of the planned launch of Aqua, a new liquidity protocol. Dune said it developed the methodology and reached its conclusions independently.