# Reimagining the AMM with 1inch Aqua | Caleb Rippey

- Channel: [ETHGlobal](https://streameth.org/ethglobal)
- Date: 2026-08-09
- Duration: 21:54
- Topics: 1inch, Caleb Rippey, 1inch Aqua, ETHGlobal Lisbon 2026, AMM, DEX, DeFi, liquidity providers, LPs, liquidity, aggregator, Aqua router, Aqua apps, strategies, SwapVM, op codes, constant product, concentrated liquidity, Dutch auction, decay, flash loans, prediction markets, privacy pools, lending, wallet, self-custody, settlement, fragmentation, yield, virtual balances, governance, effective liquidity, indexer, oracles, smart contracts, front-running, bounties, hackathon, workshop
- Watch: https://streameth.org/watch/yt-dPuLgZjFsNo
- YouTube: https://www.youtube.com/watch?v=dPuLgZjFsNo

## Description

In this workshop at ETHGlobal Lisbon 2026, Caleb Rippey from 1inch presents reimagining the AMM with 1inch Aqua, covering the current DEX landscape, how Aqua works, what it enables beyond AMMs, and the benefits for builders, LPs, and traders. He starts with the standard AMM flow: Bob the liquidity provider transfers tokens into a Uniswap pool, Alice the trader sends ETH in and gets USDC out, and if Bob withdraws his liquidity the pool empties and Alice can no longer trade. Since liquidity is spread across Uniswap, Curve, and Sushi, 1inch acts as a DEX aggregator sourcing the best liquidity, making it feel unified, but every new AMM means redesigned contracts, re-implemented custody, accounting, and settlement, more audits and attack surface, and fragmented liquidity. From the LP's perspective, choosing where to deposit is hard, participation has high opportunity cost, funds locked in a pool lose governance voting power, and moving positions is high-friction, with LPs constantly chasing fee opportunities.

Caleb explains Aqua's core idea: remove the pool in the middle so Alice trades directly against Bob's wallet balances. In Aqua, liquidity stays in the LP's wallet, is not bound to one strategy, and settlement is always atomic. The architecture has three parts: the Aqua router (an 80-line contract handling shipping and docking strategies, tracking virtual balances, and pushing and pulling tokens), Aqua apps (swap logic like constant product, Dutch auction, and concentrated liquidity), and strategies (LP commitments to those apps). He walks through the flow where Bob approves and permits the router, ships his strategy as an intent, an off-chain indexer picks up the state, and a trader's request has the Aqua app verify Bob's commitment before the router pulls and pushes tokens. Benefits include keeping governance rights, sending committed tokens freely, and reusing the same tokens across strategies so $4,000 of real liquidity becomes $6,000 of effective liquidity. He introduces SwapVM, which combines swap logic into reusable op codes (price curves, taker restrictions, fees, decay functions) so a constant product app takes only a few op codes, and notes Aqua extends beyond AMMs to prediction markets, privacy pools, flash loans, payment clearing, and lending. He closes with the bounties ($5,000 for a new Aqua app split three ways, $2,000 continuity split two ways) and a Q&A on indexers, deferred pull-and-push accounting, flash loans, and the decay op code for preventing front-running.

00:00 Introduction
00:11 What the Talk Will Cover
00:39 The Standard AMM Flow
01:09 How a Trader Swaps Against the Pool
01:34 What Happens When Bob Withdraws
01:59 Why 1inch Aggregates Liquidity
02:32 The Drawbacks of New AMMs
03:04 LP Drawback: Choosing Where to Deposit
03:34 The High Opportunity Cost of Participation
04:08 Losing Governance Voting Power
04:36 Why Moving Funds Is High Friction
05:04 Chasing Fee Opportunities
05:29 How New Projects Fragment Liquidity
05:47 The Question Behind Aqua
06:08 How Aqua Keeps Liquidity in the Wallet
06:39 The Aqua Router
06:57 Aqua Apps
07:06 Aqua Strategies
07:43 Walking Through the Aqua Flow
08:15 How Bob Ships His Strategy
08:46 How the Indexer Picks Up the State
09:18 How a Trader Pulls From Bob's Wallet
09:45 Returning Tokens to Bob
10:14 What the Design Gets You
10:35 Reusing Tokens Across Strategies
11:17 Turning $4,000 Into $6,000 of Liquidity
11:52 Handling Competing Trades in One Block
12:24 Introducing SwapVM
12:55 Constant Product in SwapVM
13:24 Op Codes and Custom Logic
13:38 How Aqua Extends Beyond AMMs
13:55 A Flash Loan Example
14:35 Subscribing to Many Strategies at Once
15:08 The Impact on the DeFi Market
15:46 The Aqua Bounties
16:20 Q&A: Indexers
16:44 Q&A: Deferred Pull and Push Accounting
17:54 Q&A: Flash Loans and Self-Liquidations
19:32 Q&A: The Decay Op Code
20:30 Q&A: Examples and Resources
21:30 Closing

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🇵🇹 *ETHGlobal Lisbon 2026*
This workshop is specifically for ETHGlobal Lisbon 2026, a 3-day hackathon held July 24-26 at the Carlos Lopes Pavillion, bringing together the most skilled web3 developers, designers and product builders from all around the globe for a weekend-long adventure to advance the Ethereum ecosystem! Watch the full ETHGlobal Lisbon 2026 playlist here: https://www.youtube.com/playlist?list=PLWgAODGnD_is

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