What is price impact?#

Price impact is the change in an AMM pool's price caused by your own swap. It grows when your trade is large relative to the liquidity available at the prices your swap must cross.

How it works in v2#

CenturionDEX v2 uses x · y = k. When you add CTN to a pool and remove another token, the reserve ratio changes throughout the swap. The first part of the trade executes closer to the starting ratio than the last part, so your average execution differs from the pre-trade spot price.

Consider a simplified pool with 1,000 CTN and 100,000 token units. The starting ratio is 100 tokens per CTN. Ignoring fees only for this illustration, adding 10 CTN would remove about 990 token units, an average near 99 tokens per CTN. The difference from the starting ratio is price impact.

The actual CenturionDEX quote also includes the v2 0.30% fee.

How it works in v3#

CenturionDEX v3 distributes liquidity across ticks. Your swap consumes active liquidity at the current tick and may cross into additional ranges. A pool can show substantial total value while having limited active liquidity near the current price.

Fee tiers also have separate pools. A lower-fee pool is not automatically the best route if it has less usable liquidity than another tier.

Price impact versus market movement#

Price impact is part of the quote because it follows from the current pool state and your amount. Slippage occurs after the quote when the available execution changes before your transaction is included.

A high slippage tolerance does not reduce price impact. It only allows more movement between quote and execution.

How to reduce price impact#

Verify that you selected the intended token contracts.
Compare available v2 and v3 routes shown by CenturionDEX.
Reduce the trade size or split it over time, considering additional Newton costs.
Avoid thin pools and newly created token markets unless you understand the risk.
Recheck the quote immediately before signing.
Do not proceed when the minimum received is materially below your expectation.

Common issues#

Impact is high for a modest amount: active liquidity may be shallow or concentrated away from the current tick.
A chart price looks better: charts show past trades, not guaranteed depth for your amount.
Output is worse than the impact estimate: market movement or token transfer logic may also be involved.
No route appears: the pair may lack compatible liquidity.

Stay safe#

Extreme price impact can be a warning of a fake token, manipulated pool, or unsellable-token trap. Verify contracts and wallet actions, and never share a recovery phrase or private key.