The electrochemical characterization related to the capacity fading of Li1.1V3O8 nano grains has been investigated. It reveals that capacity loss is associated to the use of liquid electrolyte and that it mainly stems from the active material irrespective of the nature of the liquid electrolyte, the water content, synthesis routes and the positive electrode chemistry. SEM and in operando XRD experiments allow elucidating undergoing physical processes. A film forms from electrolyte decomposition on the surface of the electrode and progressively propagates on cycling through the electrode thickness. Embedded grains become either less or none electrochemically reactive. In the former case, embedded grains give rise to strongly polarized and energetically less favored processes. In the latter case the capacity is not accessible anymore within the potential range resulting in capacity fading.