What does Insufficient Liquidity Mean on Uniswap?

What does Insufficient Liquidity Mean on Uniswap

Have you ever tried to trade on Uniswap only to get the error message that there is insufficient liquidity? This can be frustrating, especially if you’re trying to trade during a time of high volatility.

If you’re reading this, you probably tried to add liquidity to Uniswap only to get the following message: Transaction Failed: Insufficient liquidity. Don’t worry, you’re not alone. I recently tried to add liquidity to Uniswap and got the same message. Turns out, there’s a reason for this.

Why won’t My Uniswap Trade go Through?

When an individual wants to execute a transaction, they are required to have the correct balance available. If the transaction deadline has passed, it means that the individual did not have enough funds in their account to execute the transaction. Their transaction was unsuccessful.

One of the most important parts of ensuring a successful transaction is ensuring that you have time to complete the transaction before the deadline has passed. The Uniswap interface sets a default transaction deadline of 20 minutes to prevent users from executing the transaction past that time.

Why does Uniswap say I have Insufficient Liquidity?

It is important to understand the concept of liquidity. The number of tokens or currency that can be traded in the market is called total liquidity.

The total value is usually related to new assets Users won’t have the ability to trade or acquire a coin if it doesn’t have enough liquidity.

Why does Uniswap show that you have insufficient liquidity error? There are possibly a few reasons behind the issue.

The main reason is that Pancakeswap.finance has migrated to Version 2 from the old V1 and as a result, you are experiencing issues with liquidity when trading or swapping your coins through Version 1 of the platform.

Another reason is the slippage tolerance is low. With Pancakeswap, if your slippage tolerance is low, the insufficient liquidity error might occur. You should set your slippage tolerance to 12% or more before swapping cryptocurrencies.

Slippage occurs when the price of an asset moves against you. For example, if you are selling a stock, and the price of that stock goes back up after you sell it to someone else, then you have experienced slippage.

Insufficient Liquidity for This Trade Pancakeswap V2 to V1

You can try increasing your slippage tolerance to 12% or higher. The token that you are trying to swap doesn’t support the V2 exchange, so you’re getting the “Insufficient Liquidity For This Trade” error on PancakeSwap.

The error will not occur if you swap your token with an updated pool. PancakeSwap V2 is a newer version. As PancakeSwap migrated from V1 to V2, you may get an error if you try to swap new tokens. There is a fix for insufficient Liquidity on PancakeSwap that we will discuss in another article.

Final Words

From this analysis, we can see there might be a clear obstacle for your transactions, causing the “Insufficient Liquidity for this trade” error message to appear.

It’s time to learn how to fix the problem now since you know what the error means. There is no direct solution for this error on either Swap Pancake or Uniswap because it can be caused by a variety of reasons, but there are some surefire ways to fix it.

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