Curated News
By: NewsRamp Editorial Staff
July 23, 2026
DeFi Liquidity Wasted: 90% of Concentrated Funds Sit Idle
TLDR
- Nearly 90% of concentrated liquidity on DEXs is idle, signaling inefficiencies that savvy investors can exploit.
- A Dune report reveals that concentrated liquidity mechanisms fail to optimize capital, leaving most supply unused for trades.
- Riot Blockchain and others aim to deepen crypto adoption, but idle liquidity undermines DeFi's promise of efficient markets.
- Dune's report highlights that over 90% of concentrated liquidity in DeFi remains inactive despite efficiency tools.
Impact - Why it Matters
This matters because DeFi promises capital efficiency, but if most liquidity is unused, users face higher costs and lower returns. For liquidity providers, it means their funds are not earning as expected; for traders, it could lead to poor execution. The report highlights a critical flaw that must be addressed for DeFi to mature and deliver on its potential.
Summary
A new report from Dune has uncovered a startling inefficiency in decentralized finance (DeFi): a large share of liquidity supplied by users to decentralized exchanges is failing to contribute to trade execution. Despite the introduction of concentrated liquidity mechanisms designed to improve capital efficiency, nearly 90% of these funds remain underutilized, leaving substantial amounts of capital inactive. This finding challenges the promise of DeFi to optimize capital allocation and suggests that current designs may not be delivering the intended benefits to liquidity providers or traders.
As more companies like Riot Blockchain Inc. (NASDAQ: RIOT) help to deepen the penetration of digital currencies within the population, the number of transactions on DeFi networks is expected to rise. However, the underutilization of concentrated liquidity could hinder the efficiency of these trades, potentially leading to higher slippage and worse execution prices for users. This report underscores the need for further innovation in DeFi protocols to ensure that liquidity is actually used effectively, rather than sitting idle.
The findings were disseminated by CryptoCurrencyWire, a specialized communications platform within the Dynamic Brand Portfolio @ IBN. CryptoCurrencyWire provides a range of services including press release distribution via InvestorWire, editorial syndication to 5,000+ outlets, press release enhancement, and social media distribution via IBN to millions of followers. As the DeFi sector continues to grow, such insights are crucial for investors and users alike to understand the real-world performance of these platforms.
Source Statement
This curated news summary relied on content disributed by InvestorBrandNetwork (IBN). Read the original source here, DeFi Liquidity Wasted: 90% of Concentrated Funds Sit Idle
