Decentralized cryptocurrency exchanges like PancakeSwap make it easy to buy and sell digital currencies. However, these platforms also have their challenges. “Price Impact Too High” is an error that occurs when making a transaction on PancakeSwap. This problem usually occurs with the V2 version of the exchange. Facing this problem can be very frustrating as it means you cannot liquidate your tokens.
In this tutorial, you will learn why the Price Impact Too High error occurs and what you can do to fix it.
What is the price impact on PancakeSwap too high?
The price action mechanism in decentralized exchanges like PancakeSwap causes the purchase price of a token to be inversely related to its value.
For example, if you want to buy a token that costs $10, the exchange will take into account what percentage $10 represents. If $10 is 20% of the liquidity pool, the price impact mechanism increases the transaction price. The higher fee discourages large trades and provides stability to the trading pool. If you get the error “Price Impact Too High” it means that you lose a large part of your funds to complete the transaction.
The price impact relates directly to the liquidity pool. It measures the impact of your transaction on the funds allocated to the pool. Therefore, if you try to buy tokens in limited supply, the impact on the price is high.
Why is PancakeSwap experiencing too high a price impact?
The Price Impact Too High error occurred 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 migrated to the new platform. The result was less capital in V2, causing the price impact mechanism to kick in on large transactions.
PancakeSwap no longer supports the V1 version of the platform. As more developers move their funds to the updated exchange, the Price Impact Too High errors should decrease as the liquidity in the pools increases.
How to solve the price impact too high on PancakeSwap
You can use different methods to fix PancakeSwap “Price Impact Too High”. These troubleshooting techniques allow you to swap or liquidate your tokens.
Switch to the older version of PancakeSwap
The message “Price Impact Too High” appears in PancakeSwap due to insufficient liquidity on the V2 platform. While waiting for developers to migrate to V2, you can switch back to V1 to run your transactions. Although developers are moving to the updated exchange, some still have most of their money in V1. Check out how to switch back to the V1 version of PancakeSwap.
- Open PancakeSwap and connect your cryptocurrency wallet.
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- Scroll down to the bar at the bottom of the PancakeSwap page.
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- Tap on V1 (old) in the middle of the bar.
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- A pop-up message will appear informing you that V1 is no longer supported.
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- Check the box that says you understand the pop-up message.
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- Click on the “Continue with V1 anyway” button.
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You have now switched from the V2 platform, which is the default. You can now make transactions without the Price Impact Too High error. The token you are trying to swap will likely be available in the old version of the swap while the developer prepares the migration.
Make smaller transactions
The price impact mechanism calculates the percentage of liquidity you want to buy or trade. The higher the percentage, the higher the fees.
A workaround for the Price Impact Too High error would be to perform smaller transactions. They represent a smaller percentage of the liquidity pool and should not trigger the price impact mechanism.
Smaller trades can be more cumbersome as you have to make multiple transactions. However, if you follow this method, you can liquidate your tokens without losing a large part of your funds.
Increase slip tolerance
Changing the price slide on PancakeSwap could solve the “Price Impact Too High” error message. “Slippage” is the difference between the expected price of the trade and the price at which the exchange takes place. This usually happens when volatility is high or as a result of a lengthy transaction process.
Increasing a transaction’s slippage tolerance can help clear the “Price Impact Too High” message. This is how PancakeSwap works.
- Open PancakeSwap and go to “Settings” in the top left corner.
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- Scroll down to Slip Tolerance.
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- Enter the desired slip tolerance.
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There will be more flexibility to execute your trade with a higher slippage tolerance. Changing the tolerance should also clear the “Price Impact Too High” message.
When choosing the slip tolerance, it is important to find the optimal point.
Too high a tolerance will complete the transaction, but can leave you vulnerable to front-runner attacks. A front runner attack is when another user discovers your trade after the transfer and before it is completed. They will then have their transaction confirmed before yours, making a significant profit in the process. On the other hand, too low a slippage tolerance will cause the transaction to fail.
Check your internet speed
Slow internet speed can be the reason you get the message “Price Impact Too High”. A slow connection can increase the time it takes to complete a transaction. Longer transactions allow price fluctuations that can trigger the price impact mechanism.
Run a speed test on sites like SpeedTest to make sure your connection is working at its best.
Change your browser
Sometimes your browser can be responsible for the Price Impact Too High error. Switch to a different browser and restart PancakeSwap to see if that fixes the issue.
More frequently asked questions
Can the price effect be beneficial?
Yes, there are instances where the price impact mechanism can work in your favor. If the token swap you wish to conduct expands the liquidity pool, you can trade at a discounted rate. This is known as an arbitrage opportunity and can be quite profitable.
Get your tokens
When attempting to swap or buy tokens on PancakeSwap, you may sometimes encounter the message “Price Impact Too High”. This error usually occurs due to the limited liquidity in the trading pool. As more developers migrate from the older version of the exchange, the capital supply issues should resolve themselves in V2. In the meantime, you can use the tips outlined in this guide to claim your tokens without giving up a large amount of money.
Do you trade on PancakeSwap? Have you encountered the Price Impact Too High error? Let us know how you solved it in the comments below.
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