85% of concentrated liquidity sits idle, costing LPs $150M

A new report from Dune Analytics found that the vast majority of concentrated liquidity on decentralized exchanges sits idle. Over the first half of 2026, an average of 29.4% of liquidity was outside the range of active trading, generating no fees. That idle capital totaled roughly $542 million per week across four protocols: Uniswap (UNI) v3, Uniswap v4, PancakeSwap (CAKE) v3, and Aerodrome (AERO) Slipstream. The report estimated the lost fee income at $150 million a year for liquidity providers.

The idea behind concentrated liquidity was to let LPs concentrate their funds in price ranges where trading happens most. In practice, many LPs leave their positions static. More than $200 million of the idle liquidity had not been moved in over 90 days, the report said. The data suggests most LPs do not actively manage their holdings, the report added.

The problem is not evenly distributed. Individual wallets held the bulk of the idle capital. On Ethereum, wallets controlled 94% of idle liquidity and 91% of all Uniswap v3 liquidity. On Arbitrum, the numbers were 92% and 78% respectively. On Base, individual users managed 82% of idle capital, even though smart contracts accounted for roughly half of total liquidity.

Automated managers performed far better. Only 6.5% of their positions were out of range, compared with about 30% for wallet-managed capital. The report said the gap shows that active management tools are critical for concentrated liquidity to work as intended.

Uniswap v4 introduced hooks that could theoretically route idle capital to external yield strategies. So far they have not helped. The report found that 30.5% of v4's liquidity still sits out of range, similar to v3. Just 10% of v4's total value locked uses hooks at all, and none of those hooks currently generate yield from idle liquidity.