💎 Magma: When Does Price Impact Increase?
Price impact is an indicator of how much your swap will push the market price.
In Magma, the expected price impact is clearly displayed before the swap.
✅This is important because, in the CLMM structure, liquidity is divided into price bands.
🟢Small swaps are usually processed within the current tick.
➡️There is little price impact.
However,
🟠As the swap size increases,
➡️multiple consecutive ticks pass.
If this process encounters a band with thin liquidity,
the price will move sharply.
Therefore,
a high price impact value
signifies that "this swap is pushing the market."
💬 Comment
Price impact is a warning indicator
The larger the swap, the more important it is to check.
The tick structure is more important.
Source
👍Magma Official Link
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