DefineDeFiWeb3 Glossary

Price Impact

How much your trade changes the token's price. Big trades in small pools cause bigger price impacts, costing you more.

Example

Swapping $1,000 might have 0.1% price impact, but swapping $1 million in the same pool could have 5% impact.

Related Terms

Advanced Concepts

βš™οΈHow It Works

  1. 1

    Pool Size Matters

    Larger liquidity pools have less price impact per trade

  2. 2

    AMM Curve

    The bonding curve determines how much price moves per trade

  3. 3

    Trade Size

    Bigger trades move the price more

  4. 4

    Net Cost

    Price impact plus slippage determines your actual cost

πŸ“ŠKey Numbers

<0.5%
Low Impact
acceptable for most trades
0.5-2%
Medium Impact
significant but may be OK
>2%
High Impact
consider splitting trades

πŸš€Getting Started

  • 1Use DEX aggregators to split large trades across pools
  • 2Check price impact before confirming trades
  • 3Trade during low volatility periods
  • 4Consider OTC desks for very large trades
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