If you received fewer tokens than expected after a swap, it’s often due to price impact.
Price impact is the change in a token’s price caused by your own trade. The larger your trade (relative to the available liquidity), the more you push the price against yourself—resulting in a worse rate.
Why price impact happens
- Large trades move the market more, especially in small pools.
- Low liquidity means there’s not enough supply to fill your order at a stable price
- Volatile tokens can shift in price even during small trades.
Even if a token’s price is going up, a trade can still fail or return fewer tokens if the pool can’t support the size of your order.
Price impact vs. slippage tolerance
These are related, but not the same:
- Price impact is what actually happens in the pool as your trade executes.
- Slippage tolerance is how much deviation you’re willing to accept from the quoted price.
If price impact is greater than your slippage setting, the swap may fail or partially fill.
How to reduce price impact
You can’t avoid it completely, but you can manage it:
- Split large trades into smaller ones.
- Trade in deeper liquidity pools (typically during high network activity).
- Set realistic slippage: higher slippage gives more room for the swap to complete, but may lead to worse rates.
Real-world example
Say you’re swapping $2,000 of a meme token in a pool with $10,000 total liquidity. That’s a 20% share of the pool, which could cause a 15% price impact—you’ll get far fewer tokens than quoted.
But in a $1,000,000 pool, the same trade might only cause a 0.1% price impact.