304 North Cardinal St.
Dorchester Center, MA 02124
Decentralized cryptocurrency exchanges like PancakeSwap make it easy to buy and sell digital currency. However, these platforms also have their challenges. “Price Impact Too High” is an error encountered when transacting on PancakeSwap. This problem usually occurs on the V2 version of the exchange. Facing this problem can be very frustrating as it means that you will not be able to liquidate your tokens.
This tutorial will look at why the “Price Impact Too High” error occurs and what you can do to fix it.
The price shock mechanism on decentralized exchanges like PancakeSwap makes the purchase price of a token inversely related to its value.
For example, if you want to buy a token that costs $10, the exchange will consider what percentage $10 represents. If $10 is 20% of the liquidity pool, the price shock mechanism will increase the transaction price. The higher fee discourages large transactions and offers stability to the trading pool. When you get a “Price Impact Too High” error, it means you will lose a lot of your money to complete the transaction.
The price impact is directly related to the liquidity pool. It measures the effect of your transaction on the funds allocated to the pool. Therefore, the price impact is high when you try to buy tokens with limited supply.
The “Price Impact Too High” error started occurring on PancakeSwap when the platform migrated to the new exchange version in April 2021. The migration period from V1 to V2 meant that some liquidity pools were still in V1 and had not been switched to the new platform. . The result was less capital in V2, causing the price shock mechanism to kick in with large transactions.
PancakeSwap is no longer supported on the V1 version of the platform. As more developers move their funds to the upgraded exchange, “Price Impact Too High” errors should decrease as liquidity in pools increases.
You can use several methods to resolve the “Price Too High Impact” on PancakeSwap. These troubleshooting techniques will allow you to trade or liquidate your tokens.
The message “Price Impact Too High” appears on PancakeSwap because there is not enough liquidity on the V2 platform. While you wait for developers to migrate to V2, you can go back to V1 to do your transactions. Although developers are moving to the upgraded exchange, some still have most of their funds in V1. See how to go back to version V1 of PancakeSwap.
You will now have moved from the V2 platform, which is the default setting. You can now trade without the “Price Impact Too High” error. The token you are trying to trade will likely be available on the older version of the exchange as the developer prepares to migrate.
The price impact mechanism calculates the percentage of liquidity that you are interested in buying or exchanging. The higher the percentage, the higher the fees.
A solution to the “Price impact too high” error would be to make smaller trades. They will equate to a smaller percentage of the liquidity pool and should not trigger the price shock mechanism.
Smaller transactions can be more cumbersome to handle as you will have to perform multiple transactions. However, by following this method, you will be able to liquidate your tokens without losing much of your money.
Changing the price slider in PancakeSwap could resolve the “Price impact too high” error message. “Slippage” is the difference between the expected price of the trade and the price at which the trade occurs. It usually occurs when there is high volatility or as a result of a long transaction process.
Increasing a trade’s slippage tolerance can help clear the “Price Impact Too High” message. That’s how it’s done at PancakeSwap.
There will be more flexibility to place your trade with a higher slippage tolerance. Also, changing the tolerance should clear the “Price impact too high” message.
Finding the sweet spot is essential when choosing slip tolerance.
Too high a tolerance will complete the transaction, but may leave you vulnerable to attacks by favorites. A pioneering attack is when another user detects your operation after it is broadcast and before it is finished. Then his transaction will be confirmed before yours, making a significant profit in the process. On the other hand, too low a slip tolerance will cause the transaction to fail.
Slow internet speed may be the reason you’re getting a “Price Impact Too High” message. A slow connection can lengthen the time it takes to complete a transaction. Longer trades allow for price fluctuations that can trigger the price shock mechanism.
Take a speed test on sites like SpeedTest to make sure your connection is working optimally.
Sometimes your browser can be responsible for the “Price impact too high” error. Please switch to a different browser and restart PancakeSwap to see if that fixes the problem.
Yes, there are cases where the price shock mechanism can work in your favor. If the token swap you want to do is added to the liquidity pool, you can trade at a discount rate. This is known as an arbitrage opportunity and it can be quite profitable.
Sometimes you may encounter a “Price impact too high” message when trying to trade or buy tokens on PancakeSwap. This error usually occurs due to limited liquidity in the trading pool. As more developers migrate from the previous version of the exchange, the capital supply issues in V2 should resolve themselves. In the meantime, you can use the tips in this guide to get your tokens back without handing over a large amount of money.
Do you trade on PancakeSwap? Have you encountered a “Price Impact Too High” error? Let us know how you solved it in the comments below.