Swapping—or trading, exchanging, or transacting—tokens is a routine process for crypto users, but sometimes you might receive fewer tokens than expected after a trade. This is due to price impact, a common phenomenon in markets with low liquidity or during large orders. Let’s dive deeper into what price impact is, why it happens, and how you can manage it effectively.
What is price impact?
Price impact refers to the effect your trade has on the market price of a token. When you execute a large order, you consume available liquidity across multiple price levels, pushing the market price against you and resulting in fewer tokens received. Price impact is especially noticeable in low-liquidity markets, where even modest trades can significantly move the price.
What causes price impact?
Order size
Larger trades consume more of the available liquidity in the pool, leading to a bigger shift in price.
Market liquidity
Low-liquidity pools have fewer tokens available for trades. Thin markets are hypersensitive—even small trades can trigger large price swings.
Token pair volatility
Tokens with high volatility or low trading volume are more prone to impact, as their prices can shift rapidly during order execution.
Slippage tolerance vs. price impact
- Slippage tolerance is the maximum price deviation you’re willing to accept when you trade.
- Price impact is the actual market movement caused by your own trade.
Note: Even if your slippage tolerance is set to, say, 1%, a massive trade could consume all the liquidity within that band—and still push the price beyond it.
Can you avoid price impact completely?
No. In any permissionless market, price impact is inevitable when you transact against a finite liquidity pool. However, you can mitigate its effects:
Break up large orders
Split a 1,000-token trade into ten 100-token trades to reduce impact per order.
Trade during peak liquidity
Execute trades when more users are active (for example, during overlapping trading hours on multiple time zones).
Adjust slippage
Tweak your slippage tolerance in Phantom’s settings (⚙️ icon in the swap modal). Higher tolerance lets your trade fill more fully—but beware of paying a worse rate.
Review swap details and provider
Always double-check the quoted price, minimum-received amount, price impact percentage, and which liquidity provider or DEX you’re using before confirming any swap.
Examples of price impact in action
Solana (memecoin scenario)
For example, if you swap a meme-coin token on Solana with a pool depth of only $10,000 and you place a $2,000 trade, you might see a price impact of ~15%, leaving you with significantly fewer tokens than expected.
Solana (larger pool)
For example, if you trade RAY for USDC in a $200,000 pool on Solana with a $5,000 order, you could face around 0.5% price impact—much smaller, but still something to watch.
EVM chains (Ethereum)
For example, if you swap DAI for WETH in a $1,000,000 pool on Ethereum and you execute a $50,000 trade, you might incur about 1.2% price impact.
Sui (Sui network)
For example, if you exchange a SUI-based token for SUI in a $120,000 pool on Sui and you submit a $6,000 swap, you could experience around 3% price impact, meaning you’d receive 3% fewer tokens than the quoted price.
EVM chains (Polygon)
For example, if you trade WMATIC for USDT in an $80,000 Polygon pool with an $8,000 order, you might experience ~6% price impact.
Note: Always check the quoted price, the minimum received, and the price impact line in Phantom’s swap modal before you confirm.
Price impact vs. transaction fees
- Price impact: The change in token price caused by your trade size relative to pool depth.
- Transaction fees: Network fees paid to validators (for example, ~0.000005 SOL on Solana or ~10–30 Gwei on Ethereum).
Why price impact matters even for smaller trades
Even minor transactions can move the price in pools with very low depth. Always:
- Check pool depth
- Review price impact
- Set a safe slippage
By understanding how price impact works and using these strategies, you’ll make smarter, more predictable trades—no surprises.