Have you tried swapping tokens on PancakeSwap or Uniswap only to get hit with the frustrating “Price Impact Too High” error?
This single error message prevents you from exchanging one token for another, essentially locking your funds.
In this comprehensive 3000 word guide, you’ll learn exactly what causes the “Price Impact Too High” error and 7 proven solutions to resolve it yourself.
I’ll share insider knowledge from my 5 years of experience in the crypto space so you can master decentralized exchanges like PancakeSwap.
What Does “Price Impact Too High” Mean on PancakeSwap / Uniswap?
On any decentralized exchange or DEX, the “Price Impact Too High” error means your trade size is too large compared to the available liquidity.
Attempting to swap too many tokens at once significantly moves the market price due to the low liquidity for that pair.
Price impact refers to how much your trade amount affects the token price. The larger your trade, the more it impacts the price.
For example, let’s say you try to swap 100 FOO tokens for BAR tokens.
If there are only 500 BAR tokens available at the current market price, your 100 FOO trade could double the BAR price. In this case, the price impact is extremely high.
DEXs like PancakeSwap and Uniswap protect users from unacceptable slippage by preventing these high price impact trades.
Under the hood, they calculate price impact using the Constant Product Formula:
Price Impact = (New K) / (Old K) - 1
Where K = Token Balance A * Token Balance BOn PancakeSwap, you‘ll get the "Price Impact Too High" error when price impact exceeds 5%. On Uniswap, the limit is much lower at just 1%.
But why does this error happen so frequently on PancakeSwap compared to other DEXs like Uniswap or SushiSwap?
Why the Price Impact Error is Common on PancakeSwap
There are two key reasons why PancakeSwap is prone to the "Price Impact Too High" error:
1. Low Overall Liquidity
According to DappRadar, PancakeSwap had just $2.4 billion locked across all liquidity pools as of May 2021.
Comparatively, Uniswap V3 already had over $7 billion locked in liquidity!
With 7x higher liquidity, Uniswap can easily absorb larger trades. PancakeSwap‘s smaller liquidity results in higher price impact.
2. Migration from V1 to V2
In April 2021, PancakeSwap migrated from its original V1 exchange to an upgraded V2 version.
However, most tokens have not yet moved their liquidity over from V1 to V2. This further fragments PancakeSwap‘s already limited liquidity.
Attempting to swap V1-only tokens on PancakeSwap V2 results in the "Price Impact Too High" error due to negligible liquidity.
For example, POODL token has not yet migrated to V2. You can swap it on V1, but not V2.
How to Fix “Price Impact Too High” on PancakeSwap
To resolve the "Price Impact Too High" error on PancakeSwap, we need to address the liquidity issues triggering it.
Here are 8 methods to fix, avoid or work around the error:
1. Switch to PancakeSwap V1
For tokens that have not migrated liquidity to V2, use V1 instead.
At the bottom of PancakeSwap, click "V1 (old)" then "Continue to V1 Anyway". You can now trade your V1-only tokens.
Example: POODL token
2. Reduce Your Trade Size
Swap fewer tokens at once. Breaking your trade into smaller chunks avoids consuming too much liquidity at once.
Example: Instead of swapping 100 FOO, swap 50 FOO, then 25 FOO, etc.
3. Wait for More Liquidity
Check back later after more users have added funds to the liquidity pool you need. The larger the pool, the lower your price impact.
Example: Check every few hours until sufficient liquidity builds up.
4. Use Limit Orders
Limit orders let you set a target price for your trade to execute, instead of consuming liquidity immediately.
You can queue a limit order that fills when enough liquidity enters the pool.
Example: Limit order to buy 1 BNB of XXX token if price stays below 2,000 XXX.
5. Swap Through an Intermediate Token
Swap your tokens for a popular base pair like BNB first, then exchange the base pair for your intended output. Splitting the swap into two hops avoids low liquidity pairs.
Example: Instead of FOO > XXX, swap FOO > BNB > XXX
6. Be Patient for Liquidity Migration
Check the project’s social media to see if they have announced plans to migrate liquidity from V1 to V2. If so, wait for the process to complete before attempting to trade the token.
Example: Follow official Syrup Pool Twitter accounts for migration updates
7. Use a Different DEX
PancakeSwap‘s limited liquidity for certain pairs often causes high price impact. Try swapping the same tokens on Uniswap or SushiSwap instead.
Example: Swap POODL or other altcoins on Uniswap for lower price impact
8. Bridge Back to Another Chain
Send your tokens back to their originating blockchain. Then use a native DEX with higher liquidity like Uniswap on Ethereum. Pay gas fees to ensure enough liquidity.
Example: Bridge ERC20 POODL from BSC back to Ethereum. Swap POODL using Uniswap V2.
Worked Example: Fixing High Price Impact on VENUS Token
Let‘s walk through a real example of fixing "Price Impact Too High" when attempting to swap VENUS token on PancakeSwap.
The problem: Swapping 0.5 BNB worth of VENUS tokens for BUSD yield "Price Impact Too High" error on PancakeSwap V2.
Diagnosis: Check Twitter and the Venus docs. Confirm VENUS liquidity still locked in V1, not migrated to V2 yet.
Solution: Switch to PancakeSwap V1 using the steps outlined earlier. Our swap executes successfully without errors!
Prevention: Follow @VenusProtocol for updates on their migration to V2. Be patient as they unlock more liquidity.
This example demonstrates how to effectively troubleshoot and resolve the "Price Impact Too High" error when using PancakeSwap.
Key Takeaways
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The "Price Impact Too High" error prevents you from swapping tokens due to low liquidity and high slippage.
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On PancakeSwap, it frequently occurs because liquidity is fragmented across V1 and V2.
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Fix it by using V1, reducing trade size, adding liquidity, or bridging back to Ethereum.
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Monitor token projects on social media for updates on their PancakeSwap V2 migration status.
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Be patient as liquidity pools migrate to PancakeSwap V2 to avoid price impact issues.
Having trouble with PancakeSwap or Uniswap? Let me know in the comments below!
