When executing a Swidge, users may receive a high price impact warning. This happens when the size of the trade is large enough to significantly affect the market. This scenario is more common for tokens with low liquidity (e.g new tokens), token pools on less popular networks, or when the size of the trade is particularly large.

These types of trades will typically result in far less tokens than the user expected, as the market price will move with the trade. A warning will be given to users to make them aware of this.

If a price warning is received when users are making large trades, we recommend breaking it up into smaller trades which will lessen the impact to the market. If possible, users are also recommended to trade tokens with higher liquidity, so that larger trades have less impact on prices. Often, tokens have more liquidity on more popular networks.

Let’s go through an example of a trade that would result in high price impact. Say we want to Swidge 1000 USDC for $DRV on Optimism, a token which has low liquidity on this particular network.

This trade represents a very large portion of the liquidity of DRV on Optimism, and so has a large price impact on that market. Proceeding with the trade would result in far less DRV than the user expects.

In this scenario, the user can either make a series of much smaller trades, or trade to DRV on Base which has more liquidity.

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