Insufficient Liquidity For This Trade | How To Fix
Mike Harry
Feb 2024
4 min to read
Fact checked
Introduction: Insufficient liquidity for a trade can be a major issue when trading on decentralized exchanges. Fortunately, there are ways to mitigate this risk when using exchanges like Uniswap or Pancakeswap. This guide breaks down everything you need to know about liquidity and how to fix insufficient liquidity issues!
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Insufficient Liquidity for this trade
Insufficient Liquidity for this trade is a message frequently encountered on decentralized cryptocurrency exchanges that operate on automated market maker (AMM) models such as Uniswap, PancakeSwap, SushiSwap and others. This message signifies a limitation in available assets for trade on these platforms.
Liquidity refers to the available amount of an asset that can be traded in a market. Insufficient Liquidity for this Trade error is a common issue that occurs when there is not a sufficient quantity of the asset being purchased.
This happens when users are trying to buy low liquidity coins or tokens on decentralised exchanges. While automated market makers (AMMs) like Uniswap and Pancakeswap were created to solve liquidity issues on decentralized exchanges, they are not perfect!
Decentralized exchanges differ from centralized ones in that they rely on liquidity pools instead of traditional order books. In these pools, users contribute assets, facilitating trades and earning rewards in return.
The depth of assets, or liquidity, in these pools dictates the ease with which trades can occur. The deeper the liquidity, the smoother large trades can be executed without causing substantial shifts in an asset's price.
Uniswap insufficient liquidity for this trade
Insufficient liquidity for this trade on Uniswap means that there is not enough liquidity available on the Uniswap exchange to complete the trade you are trying to make.
Uniswap insufficient liquidity for this trade
Liquidity refers to the amount of an asset that is available for trading. In the context of Uniswap, liquidity is provided by users who deposit their tokens into liquidity pools.
When you make a trade on Uniswap, your trade is executed against the tokens in the liquidity pools. If there is not enough liquidity in the liquidity pools for the trade you are trying to make, your trade will fail. This can happen for a number of reasons, including:
1. The tokens you are trying to trade are not very popular. 2. The market for the tokens you are trying to trade is very volatile. 3. There is a lot of activity on the Uniswap exchange.
Pancakeswap insufficient liquidity for this trade
Insufficient liquidity for a trade is something that can occur on all AMMS like Uniswap, Pancakeswap and many others exchanges.
Pancakeswap insufficient liquidity for this trade
If you are getting the "Insufficient Liquidity for this Trade" error, there are a few things you can do:
1. Try trading a different pair of tokens. 2. Wait for the market to become less volatile. 3. Increase your slippage tolerance. 4. User a popular pair of tokens with more liquidity.
Below we will go into more detail for how to solve this issue.
How to fix Insufficient Liquidity for this trade
Insufficient liquidity issues can occur when using decentralized exchanges like Uniswap and Pancakeswap, even though they provide traders with ways to increase liquidity.
However, insufficient liquidity can still be a limiting factor, and you should always consider the available amount of liquidity before executing any trade.
Below we have outlined a few ways that you can deal with the issue of insufficient liquidity irrespective of which exchange you are trading on.
1. Increase Slippage Tolerance
If you are willing to possibly pay a higher price, you can solve this issue by increasing the Slippage Tolerance. Slippage refers to the difference between the expected price of the trade and the price that is actually executed.
So if you want to buy for 100$ and you set the slippage to 10%, you may end up receiving $90 worth of that asset.
Uniswap & Pancakeswap Slippage Settings
2. Change Exchange Version
Occasionally, it may be the case that you have to switch to an older version of the exchange that has deeper liquidity. If that is the case, simply switch from one version to another.
3. Reduce Purchase Amount
To limit the effect of causing a drastic change to the price of an asset, simply buy smaller amounts.
4. Avoid insufficient liquidity error
Before buying, check if the token or coin that you are trying to buy has sufficient liquidity. You can use coingecko to check liquidity for each pair.
Click on Exchanges in the menu and navigate to the exchange that you want to buy from.
Below we have outlined a screenshot from the Osmosis DEX. Ideally you want to see a few tens of thousands on the +2% or -2% depth columns.
Osmosis liquidity review on Coingecko
5. Use Centralized Exchanges (CEXs)
As much as we all want to use decentralized exchanges, occasionally we are forced to use centralized exchanges to satisfy our trading needs.
When that's the case, we recommend using beginner-friendly and regulated exchanges like eToro and Uphold which both offer a wide range of cryptocurrencies, deep liquidity and low trading fees.
Not enough liquidity found for this asset pair
Within these liquidity pools, two tokens form a pair and users can swap between them. For instance there might be a liquidity pool for ETH and USDT, allowing users to switch between Ethereum and the USDT stablecoin.
In some cases however, there may not be enough liquidity for one of the asset pairs which is when the error message of "not enough liquidity found for this asset pair" appears.
Not enough liquidity to convert Coinbase Wallet
The same issues with low liquidity that plague decentralized exchanges also impact non-custodial wallets like Coinbase Wallet, MetaMask,Trust Wallet and others as these wallets in many cases offer swaps via DEXes that they have integrated into the wallet.
eToro USA LLC: Investments are subject to market risk. Including the possible loss of principal. Don’t invest unless you’re prepared to lose all the money you invest.
