Price impact is the change in token price directly caused by your trade. Price impact is reflected as the difference between the current market price and how your trade impacts the total liquidity in a pair.
The price impact you experience depends on the liquidity available for the pair.
When the pair has high liquidity, your trade may have a smaller price impact. When the pair has low liquidity, your trade may have a larger price impact.
Therefore, the larger the price impact, the worser the overall price you may receive.
It’s important to remember that the price impact rate changes constantly, because the total liquidity of a pair changes based on the supply and demand of each token.
Low Price Impact Example:
The example below shows low price impact. In this transaction, the price impact rate changes in a positive direction and a surplus amount (<0.0001%) is returned.
High Price Impact Example:
The example below shows high price impact. In this scenario,D5 will initiate a price impact warning because you’re likely to experience a significant loss.
At your own risk, you can complete this transaction by turning on the”Toggle Expert Mode”in the settings.
Select this button on the Trade page and enter slippage tolerance. Clicking “Auto” button will revert to the default slippage tolerance.
