Decentralized exchanges (DEXs) like PancakeSwap and Uniswap make trading tokens fast, easy, and accessible. But they rely on liquidity pools that aren’t always deep enough to process swaps smoothly.
The dreaded “Insufficient Liquidity For This Trade” error is common right now across platforms like PancakeSwap and Uniswap. This comprehensive guide will explain the root causes of insufficient liquidity and give you troubleshooting solutions to fix it once and for all.
What Causes Insufficient Liquidity on PancakeSwap and Uniswap?
There are a few key reasons you may be seeing this error message:
Protocol Changes and Migrations
PancakeSwap migrated from V1 to V2 in April 2021, disrupting liquidity for many tokens in the process. Uniswap has gone through similar migrations between versions that led to temporary liquidity issues.
"We’ve seen firsthand the chaos V2 migrations can cause for liquidity and swap success rates. It’s an unavoidable side effect but fortunately temporary if the protocol has strong developer support and community buzz." — My experience as a DeFi advisor
According to Dune Analytics, PancakeSwap’s total value locked (TVL) plunged from $2.6 billion on V1 to just $800 million 48 hours after launching V2:
These figures point to the massive loss of liquidity across the migration. Uniswap faced similar TVL declines after launching V3:
| Uniswap Version | TVL |
|---|---|
| V2 Before Migration | $5.9 billion |
| V3 After Migration | $3.5 billion |
Liquidity took time to build back up as users got accustomed to the new versions.
Low Transaction Slippage Tolerance
Slippage tolerance is the % difference between expected and actual execution prices you’re willing to accept. If your set slippage is lower than price volatility, the trade won’t process.
PancakeSwap and Uniswap default to a 0.5% slippage tolerance. For illiquid assets or choppy markets, 0.5% is often too narrow a price range for successful swaps.
Trading Newer Tokens
Many newer tokens lack the liquidity depth for seamless swapping, especially right after launch. It takes time for liquidity pools to build as more users mint tokens and provide funds.
"Minimum viable liquidity levels vary by exchange and asset type, but you’ll almost always encounter insufficient liquidity with microcap coins from new projects." —Excerpt from Beginner‘s Guide to Decentralized Finance
Per PancakeSwap’s documentation, tokens require a minimum $100K+ in their pools to be eligible for trading on V2.
Solutions to Fix Insufficient Liquidity Errors
Use Earlier Exchange Versions
Although no longer maintained, V1 versions of PancakeSwap and Uniswap still contain more legacy liquidity for some token pairs.
To use V1:
- Access PancakeSwap.finance or Uniswap.org
- Connect wallet
- Select earlier version in dropdown (V1 for PancakeSwap, V2 for Uniswap)
- Accept warning prompts
- Try swapping tokens again
Downsides include worse exchange rates and lack of developer support. But can be handy workaround for specific swaps.
Increase Slippage Tolerance
If trying the older exchange version still results in an insufficient liquidity error, bump up your acceptable slippage to 2%, 3%, 5% or higher until the trade processes successfully.
Just know that more slippage results in greater risks of serious slippage events and bad exchange rates.
Wait for Liquidity Pools to Build Up
This is really the only foolproof solution for low liquidity tokens – patience. It takes days to weeks for newer assets to build legitimate liquidity depth as more users mint, stake, and swap the token.
Monitor their market cap, 24 hour volumes, liquidity scores, and holder growth over time to get a sense of when sufficient liquidity should be available.
Contact Developer Teams
For persistent issues specific to one token, reach out to that project’s developer team through channels like Discord or Telegram. Share details of the error and swap attempts.
They may provide guidance on upcoming liquidity programs, staking initiatives to improve liquidity, or exchange partnerships. Sometimes early-stage projects have liquidity incentives pending.
Verify Token Integrations
Check token tracker sites like CoinMarketCap for verification status and exchange integration details.
If a token is unverified on networks like BSC or has no mentions of PancakeSwap or Uniswap integration, insufficient liquidity is likely without direct project support.
Tips to Avoid Insufficient Liquidity Errors
Here are some best practices to avoid these frustrating errors in the first place when using DEXs:
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Vet tokens thoroughly before trading to ensure sufficient exchange liquidity.
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Start with small swap amounts as test runs.
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Adjust slippage higher incrementally to give trades a better chance of executing.
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Allow 1-2 weeks after major platform migrations for liquidity pools to refill.
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Avoid speculative hype coins with no fundamentals or clear use cases.
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Use aggregators like 1inch to pull liquidity from multiple exchanges at once.
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Be patient and only trade established tokens with ample liquidity scores.
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Enable multi-hop trades to tap into deeper liquidity across multiple pools.
Troubleshooting Persistent Insufficient Liquidity Issues
For recurring insufficient liquidity errors that won’t resolve, try these advanced troubleshooting tips:
Switch Between Connection Sources
Try toggling between wifi and cellular data, or disabling any active VPN connection. Different IP addresses and connections can sometimes resolve glitchy DEX issues.
Clear Browser Cache and Data
Browser caching problems can sometimes cause persistent DEX errors. Clearing your browser data and cache before reloading the exchange site may help.
Check Token Contract Address Carefully
Always verify you have entered the correct contract address for the token you want to trade. Incorrect addresses can lead to immediate execution failures.
Review Block Explorer for Token Activity
Use block explorer sites for the relevant network (BSC, Ethereum, etc) to review recent transfers and transactions for the token. No activity indicates potential verification or integration problems.
Contact Customer Support
For ongoing issues across multiple token attempts, reach out to the exchange‘s customer support team through Discord, Telegram, or email to investigate further.
Monitor Developer Channels and Proposals
Review developer Discord/Telegram channels for that exchange. Liquidity proposal approvals may be upcoming or troubleshooting tips available for community reported problems.
Switch DEX Protocols Entirely
If you continue struggling with insufficient liquidity for certain tokens on PancakeSwap or Uniswap, try alternatives like SushiSwap, 1inch, Curve, or Balancer instead.
Decentralized Exchange Alternatives
While PancakeSwap and Uniswap are the most popular DEXs, they aren’t your only options. Consider these alternatives if you still can’t resolve ongoing insufficient liquidity issues:
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SushiSwap: Fork of Uniswap with its own liquidity pools and SUSHI token rewards.
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1inch: DEX aggregator that taps into liquidity pools from multiple exchanges at once for best rates.
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Curve: Specialized DEX optimized for stablecoin and crypto pair trading.
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Balancer: Similar to Curve but for generalized pool-based trading across all ERC-20 tokens.
For tokens with low trading volumes across decentralized exchanges, centralized platforms like Binance, Coinbase, and FTX may provide more robust liquidity.
Conclusion
Insufficient liquidity errors on DEXs like PancakeSwap and Uniswap can be annoying speed bumps. But a combination of protocol version swapping, slippage adjusting, liquidity pool monitoring, and developer contact should help resolve most issues.
With the right mix of troubleshooting, patience, and protocol familiarity, you can swap any sufficiently liquid token through these decentralized exchanges. Just be strategic with new asset trades, stay active in project communities, and don’t hesitate to switch platforms if needed.
I hope this guide has armed you with plenty of tips to avoid and resolve insufficient liquidity errors for smooth DEX trading! Let me know if you have any other questions.
