How Aqua protects your liquidity position from traditional JIT fee-sniping
Just-in-time liquidity can let opportunistic bots capture fees from swaps without taking the same ongoing exposure as long-term LPs. 1inch Aqua changes the structure that makes this possible.
You provided liquidity, took the market risk and waited for trades. Then a bot appeared for a single swap, captured part of the fee and disappeared.
That is the problem with just-in-time, or JIT, liquidity, which 1inch Aqua addresses at the level of liquidity architecture. In conventional pooled AMMs, fees are distributed to whoever has liquidity active when a trade executes. A sophisticated actor can therefore add liquidity immediately before a large swap and remove it immediately afterwards, taking a share of fees that would otherwise have gone to existing LPs.
Research suggests the impact can be significant. A 2025 academic study of concentrated liquidity market makers found that strategically deployed JIT liquidity could reduce passive LP profits by up to 44% per trade on average in its model. The same research also found that JIT liquidity can improve execution for traders by adding depth at the moment it is needed, making JIT a more nuanced phenomenon than a simple attack on the market as a whole. For passive LPs, however, the fee dilution is very real.
Conversely, with 1inch Aqua, an external LP cannot add liquidity to your Aqua strategy immediately before a swap and snipe your fee. The strategy executes only against your balance, and only you collect fees for your strategy. With that setup, a traditional JIT fee-sniping mechanism can’t work.
How JIT fee-sniping works
JIT liquidity exploits a simple feature of pooled AMMs: fee ownership depends on who is providing liquidity when the swap happens.
A typical sequence looks like this:
- A large pending swap becomes visible in the mempool.
- A JIT actor adds a large amount of concentrated liquidity around the price range the trade is expected to cross.
- The swap executes and generates fees.
- The temporary liquidity receives a share of those fees.
- The JIT actor removes the liquidity immediately afterwards.
The actor can provide and withdraw liquidity even in a single block - providing liquidity immediately before actual swap transaction and withdrawing it immediately after, gathering most of the swap fees. A long-term LP, meanwhile, may have kept capital in the pool for days or weeks while taking continuous market exposure.
The problem is not that the AMM distributes fees incorrectly. The system is working exactly as designed. Fees are distributed according to active liquidity at execution time.
That design creates an opening for fee-sniping.
As the 1inch analysis of liquidity provision and MEV explains, JIT differs from a conventional sandwich attack. A sandwich attack targets a trader’s execution. JIT targets the LP side of the trade by temporarily changing who receives the fees.
Why pooled liquidity creates the opportunity
A conventional AMM pool combines capital from many LPs.
When a swap executes, fees are shared among eligible liquidity providers according to the protocol’s rules. In concentrated liquidity AMMs, that generally means LPs whose liquidity is active in the price range through which the trade passes.
This creates a shared fee event.
Anyone able to add enough liquidity at the right moment can increase their share of that event. The JIT actor does not need to have provided liquidity before the transaction appeared or remain exposed after it finishes.
For a passive LP, the effect is dilution. The swap still generates the same fee, but the long-term LP receives a smaller share because temporary liquidity arrived just in time to compete for it.
JIT strategies are especially relevant when a trade is large relative to existing liquidity and the expected fee is large enough to justify the cost and risk of inserting temporary capital.
Aqua removes the shared fee position
1inch Aqua uses a fundamentally different liquidity model.
Aqua is a shared liquidity layer rather than a conventional pooled AMM. Tokens stay in the LP’s wallet until a swap fills, and the same wallet balance can support multiple positions at once.
More importantly for JIT, each Aqua strategy belongs to one LP.
An external LP cannot add liquidity to somebody else’s Aqua strategy immediately before a swap. The strategy executes against the balance of its owner, and fees generated by that strategy belong to that owner.
This removes the core mechanism behind traditional JIT fee-sniping.
There is no shared pool position that an outside actor can enter for one transaction, collect part of another LP’s fee and immediately leave.
One owner changes the fee equation
Consider the difference between the two models.
In a pooled AMM, Alice and Bob may both provide liquidity to the same pool. If a large swap appears, a JIT bot can potentially add far more liquidity than either of them for the duration of that swap. Alice and Bob remain LPs, but their relative share of active liquidity falls, so their share of the fee falls with it.
With Aqua, Alice’s strategy is Alice’s strategy.
A bot cannot inject its own tokens into Alice’s position to claim part of the fee. If a swap is executed against Alice’s strategy, the resulting fee accrues according to that strategy’s rules without an external LP diluting her position at the last moment.
The protection comes from ownership structure rather than from trying to detect or outrun JIT bots.
No deposit-and-withdraw race
Aqua also changes another part of the JIT mechanics. Traditional JIT depends on rapid liquidity entry and exit: deposit before the trade, withdraw after it.
Aqua LPs do not deposit their tokens into a shared pool. Tokens remain in the wallet, while strategies receive permission to use them when their execution conditions are met. Aqua’s architecture allows the same wallet balance to support several strategies without locking that balance into separate pools.
Because liquidity is not repeatedly added to and removed from a shared LP pool, there is no equivalent race to temporarily become part of another LP’s position.
This does not mean nobody can create a competing Aqua strategy. Different LPs can still quote competing prices and liquidity, which is a normal part of a market.
The key distinction is that competition happens between independently owned strategies, not by inserting temporary liquidity into somebody else’s strategy and taking part of its fee.
What Aqua does - and does not - protect against
Aqua’s single-owner strategy model removes a structural JIT vector, but it does not remove the normal risks of liquidity provision.
LPs can still face:
- price movements and impermanent loss;
- unfavorable market conditions;
- strategies that receive little or no order flow;
- smart contract risk;
- execution and strategy-design risk.
Swap fees are also not guaranteed. The 1inch Aqua FAQ makes clear that a position earns fees only when swaps fill against it.
Aqua’s JIT protection is more specific: an outside actor cannot temporarily add liquidity to your strategy simply to dilute your fee share on an incoming trade.
Protecting the fee you actually earned
Liquidity provision means taking risk in exchange for the possibility of earning fees. A system in which somebody can arrive for a single profitable transaction and take a disproportionate share of those fees changes that equation for long-term LPs.
Pooled AMMs make JIT possible because liquidity and fees are shared at the moment of execution.
Aqua removes that shared ownership layer. Each strategy has one LP, so another liquidity provider cannot insert capital into your position just before a swap and leave with part of the fee afterwards.
The result is a simpler principle: if a swap executes against your Aqua strategy, another LP cannot use traditional JIT fee-sniping to dilute that strategy’s fee share.
Explore 1inch Aqua and learn how shared liquidity changes liquidity provision in DeFi.
Disclaimer: This content is provided for informational purposes only. Nothing in this material constitutes financial, investment, legal or tax advice, or a recommendation to enter into any transaction. Providing liquidity involves risk, including the possible loss of funds. Swap fees are not guaranteed, and 1inch Aqua remains subject to market, smart contract and strategy-related risks.
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