When trading on Swyftx, you may come across certain assets that show a 'low liquidity' warning, a 'limited functionality' warning, or sometimes, both.
Low liquidity assets
You will see a warning in the order panel when trading assets with low liquidity. Assets with low liquidity tend to be exposed to higher spreads and incur greater slippage.
To find out more about slippage, read our Swyftx Learn article What is Slippage in Crypto?
There are some guidelines to follow to help manage the risks associated with trading low liquidity assets:
- When buying a low liquidity asset, enter the amount of base currency you want to spend, not the amount of the asset you want to buy.
- When selling a low liquidity asset, enter the amount of the asset you want to sell, not the amount of base currency you want to receive in return.
- The order size for low liquidity assets is limited to a maximum of $3,000 AUD equivalent.
You can place multiple orders at this size to buy or sell more, but be aware that prices can change more than expected.
This is because you could be buying significant amounts of the available liquidity or contributing to an oversupply of a token that people are trying to sell.
Limited functionality assets
Swyftx lists a small number of assets with limited functionality, and you will see a warning in the order panel when trading these assets.
For example, these limitations could include the inability to deposit or withdraw or a combination of those functions.