Skip to content

When trading on a DEX, what is the loss that can occur when the size of the liquidity pool is small compared to the size of the transaction?

OverWallet is a blockchain entry with a soft-landing reward system.

You can get point rewards by completing daily activities and missions like quizzes.

The Blockchain Learning Hub has daily quizzes to enhance your blockchain knowledge.

To get started, sign up using this link mobile.over.network/en/invite/3SDAUQX99B or use “3SDAUQX99B” as the invitation code.

When you sign up using the invitation code, you’ll get a 1,000 P bonus.

To begin a quiz, open the OverWallet app, select the “Missions” tab, and select “Daily quiz”.

In this guide, you’ll learn the answer to “When trading on a DEX, what is the loss that can occur when the size of the liquidity pool is small compared to the size of the transaction?” in OverWallet.

When trading on a DEX, what is the loss that can occur when the size of the liquidity pool is small compared to the size of the transaction?

Question: When trading on a DEX, what is the loss that can occur when the size of the liquidity pool is small compared to the size of the transaction?

Answer: Price Impact.

Further reading

Which blockchain platform is known for its focus on enhancing privacy through features like Confidential Transactions and Bulletproofs?

What are the losses that liquidity providers may experience when the exchange rates for token trading pairs on a DEX increase significantly?

What do we call the entity that provides liquidity to the liquidity pool on a DEX?

Subscribe to our newsletter

Join our community and be the first to know about new product launches, upcoming events, helpful tips, and more.