All You Need to Know About Price Impact on Decentralized Exchanges
5 min read
•
Jan 18
The phenomenon known as price impact is a constant pain for traders who are familiar with high-frequency trading or have ever traded on cryptocurrency exchanges. When the effects of a price impact take place, traders are at a loss, bringing about frustration and financial setback.
What Is Price Impact?
The phenomenon of price impact can be best explained by the sudden change in the price of an asset as a result of the processing and execution of the transaction related to it.
The price impact itself is calculated in the form of the size of the order being traded in relation to the amount of liquidity currently available. The relation
