In the Binance smart chain, the PancakeSwap platform is a decentralized exchange established. In other words, the services provided by this decentralized exchange get restricted to tokens that have been established on the Binance Blockchain. The use of services such as token transactions and monetization procedures such as obtaining tokens at a decentralized exchange such as PancakeSwap are also available to users. Many people prefer to use Pancakeswap because the interface is easy to understand. On PancakeSwap, you will come across price impact too high error.
The price effect of underlying tokens refers to how they affect your trade or transaction depending on the current market price. In layman’s terms, the inaccuracy indicates that you will most likely lose a significant portion of your money if you proceed with the transaction. If the token pairs in the pool are illiquid, the price effect will be high and vice versa.
If the token pairings in the pool are liquid, the price impact will be low and vice versa. After PancakeSwap upgraded from Version1 to Version2, an error arose stating that the “Price effect is too large.” The developers of PancakeSwap should be the ones who check for consistency between the two versions to avoid the issue from occurring. You can work around the problem by experimenting with various available alternatives.
What Is Price Impact Too High on PancakeSwap?
Specific users of decentralized exchanges, particularly those using the PancakeSwap decentralized exchange, may get an error message stating that the price impact is too high during some transactions. This mistake might provide a barrier to their transactions. When you see the message “Price Impact Too High,” you will lose a significant amount of money when you switch your tokens. Your trade’s effect on the market price of the underlying tokens gets referred to as the price impact. It is correlated with the quantity of liquidity available in the pool of funds.
The price impact will be more severe for token pairings that are not widely traded. Such an enormous price impact is that there are only a few Dipper Network sellers, resulting in excessive transaction fees. If both coins had high liquidity, the mistake would not have occurred in the first place. You have two options: either reduce the amount you wish to be exchanged or wait for additional liquidity in the pool to become available.
Why Does Price Impact Too High Occur in PancakeSwap?
The transition from PancakeSwap V1 to V2 has resulted in many mistakes. Many cryptocurrencies have not yet upgraded or moved their liquidity pools. As a result, specific tokens will be unavailable for swapping on the new version of PancakeSwap. Specific users of decentralized exchanges, particularly those using the PancakeSwap decentralized exchange, may get an error message stating that the price impact is too high during some transactions. This mistake might provide a barrier to their transactions. If you experience the price impact too high error on PancakeSwap, it could be because:
1. The Price Impact is Too High
The Price Impact Mechanism, implemented in blockchain technology, is designed to prevent Whales from manipulating the pricing of cryptocurrency token values. A considerable number of tokens or coins are purchased or sold by the whales, and the currency’s market price is affected. The Price Impact method has gotten implemented to prevent this from happening again.
The cost of a crypto asset purchased or sold on a DeFi Exchange becomes inversely proportional to the number of times the item is traded due to this process. It is the liquidity pool that has a direct influence on prices. It assesses the impact of your transaction on the funds allotted to the pool and provides a result in dollars. So when you try to acquire tokens in limited quantity, the price impact is significant. It could be possible that you are not experiencing an error, and the price impact is too high.
2. There’s Not Enough Liquidity in the Pool
Liquidity pools are virtual marketplaces where trade occurs, and corporations generate profits. A lack of adequate liquidity indicates that the liquidity pool of supply does not contain sufficient assets and that the transaction has not gotten completed effectively. A liquidity pool may be thought of as a pool of tokens locked in a smart contract.
By providing users with liquidity, the pool facilitates bitcoin trading for them. The simplicity with which a token may get exchanged for another is liquidity. Since liquidity pools directly associate trade prices and volume, they impact both the price of tokens and the number of trades. If you get the price impact too high error, this could be caused by the low levels of liquidity in the pool.
3. Slow Internet Connection
You may see the “Price Impact Too High” notification because your internet connection is too slow. Having a sluggish connection might increase the time it takes to conduct an online purchase. Extended transactions allow for price swings that can trigger the price impact mechanism when the transaction is longer than one day. Use speed testing websites such as SpeedTest to check that your internet connection is working at peak performance.
Can You Prevent the Price Impact Too High Error?
Price impacts are most common when purchasing or selling a new and inherently unstable token. If you wish to buy these tokens, you need first make sure they have the following characteristics:
Pool depth: Because newly minted tokens often do not have a significant trading volume, it is difficult to determine the depth of their pool because these tokens are not listed on recognized exchanges. As a result, it is challenging to decide on the depth of their pool. As a result, it is advised that you pick a legitimate token whose pools have a high level of liquidity.
Using aggregators: DEX Aggregators automatically examine the price of the token on each decentralized exchange and then choose the exchange that gives the best price for the transaction, as shown in the diagram below.
Trading volume: Don’t be concerned if the amount of money you want to invest is smaller than the amount that other people are transferring to you. Price Impact may result if you do not comply.
How to Fix Price Impact Too High Pancakeswap?
When attempting to trade or acquire tokens on PancakeSwap, you may receive an error message stating that the “Price Impact is Too High.” Due to a lack of liquidity in the trading pool. As more developers transition away from the earlier version of the exchange, the capital supply issues that have plagued V2 should begin to be alleviated. Meanwhile, you can follow the suggestions provided below to correct the problem.
1. Change Browser
Several factors, including your browser, can cause the “Price Impact Too High” error message. If the problem persists, try switching to a different browser and relaunching PancakeSwap to see if that fixes it.
2. Increase Your Slippage Tolerance
Even if a transaction with a high tolerance gets completed, it may leave you open to front-runner attacks if the tolerance is set too high when another user notices your transaction after publication. Still, before it has been consummated, this is referred to as a front-runner attack. Their transaction will then be verified before yours, allowing them to make a big profit. In contrast, a transaction that has a slippage tolerance that is too low would result in the transaction failing.
Some users claim that changing the Slippage Tolerance to complete them is a fix. If you want to fix the Price impact too high error on Pancakeswap changing the Slippage Tolerance to complete the transaction can be a good solution for you as well when you encounter a Price On PancakeSwap; here’s how you go about doing it:
- Open PancakeSwap and choose “Settings,” which may be found in the top left corner of the screen.
- Continue reading until you reach “Slippage Tolerance.”
- Input the amount of slippage tolerance you want.
- Because of the increased slippage tolerance, there will be greater flexibility in carrying out your deal with a bigger slippage tolerance. Additionally, lowering the tolerance should remove the “Price Impact Too High” notice.
3. Use Another Exchange
Investors now have more alternatives than ever before to exchange cash for decentralized digital money, thanks to the continued growth in the number of cryptocurrencies available. Cryptocurrency exchanges, where users may purchase, trade, and store their cryptocurrencies, are the most common means of gaining access to them. When deciding which cryptocurrency exchange to use, there are many considerations to consider. One of the most successful methods of obtaining a Pancakeswap fix when the price impact is too significant is to use other exchange offices.
4. Wait for Liquidity Pool to Increase
Thanks to liquidity pools, it is possible to purchase and sell cryptocurrency on other Defi platforms without needing centralized market makers. Liquidity pools are pools of tokens that have gotten crowdsourced. They are intended to enable trading between assets on a decentralized exchange. Rather than traditional buyer-seller markets, several decentralized financial systems employ automated market makers, which leverage liquidity pools to allow digital assets to be exchanged automatically and without authorization.
The liquidity providers are compensated by the transaction fees others pay to purchase and sell from the pool. Those transaction fees are re-invested back into the liquidity pool, which helps increase the value of your tokens while also expanding the liquidity pool’s size. If the impact price is too high, you can always wait for the liquidity pool to increase before you make a move.
5. Buy Less of the Coin
The price impact method must get used to determine how much liquidity you are interested in purchasing or swapping. The fees increase in direct proportion to the percentage of the total. A solution for the “Price Impact Too High” problem would be to conduct smaller transactions to avoid it from occurring. It is expected that they will represent a lesser proportion of the liquidity pool and not trigger the price effect mechanism. On the other hand, smaller deals can be more challenging because you will have to complete many transactions. However, if you follow this procedure, you will be able to liquidate your tokens without losing a significant amount of your money in the process.
6. Switch to V1
The “Price Impact Too High” notice appears in PancakeSwap when there isn’t enough liquidity on the V2 platform, so the message appears. While you’re waiting for developers to make the conversion to V2, you can continue to conduct your business as usual using V1. Although developers are migrating to the new market, some still have most of their cash in V1. Learn how to revert to the PancakeSwap V1 version by following the steps below:
- Open PancakeSwap and choose your bitcoin wallet from the drop-down menu.
- Scroll down to the bottom of the PancakeSwap page and click on the bar at the bottom. V1 is positioned in the center of the bar and should be tapped.
- A pop-up notice will display that the server software no longer supports V1.
- Select the checkbox indicating that you have read and understood the pop-up notice.
- Continue to V1 regardless by using the “Continue to V1 anyway” button.
- You will have successfully transitioned away from the V2 platform, the default configuration. You should be able to complete transactions without seeing the “Price Impact Too High” warning. As the developer works to transfer the exchange, likely, the token you are attempting to trade will still be available on the previous version of the exchange.
7. Disable Multihoops
Disabling multi hoops on PancakeSwap restricts swaps to only direct pairs. It is one option to try if you get the price impact too high error on PancakeSwap. Not many people are aware of this option, but you can give it a go and see if it works for you.
Pancakeswap’s developers are working on a solution to this problem. Still, we want to assure you that it is not anything you should be very concerned about because it affects all users who have upgraded from Version1 to Version2 of the application. All Pancakeswap users who have experienced this problem must first and foremost comprehend the meaning of the word ‘price effect.’
There are two situations in which the Price Impact Too Significant error occurs: when the tokens being exchanged do not have high liquidity and when the tokens being exchanged have a minimal number of sellers concerning the token expected to be received after the exchange. Meanwhile, while developers are still working on migration and up-gradation of versions, Pancakeswap users can temporarily attempt switching to a new device or using a different browser application if none of the suggestions above successfully remove the Price Impact issue.