Summary: The "insufficient liquidity for this trade" error that is commonly found on Uniswap, Sushiswap and other Decentralized Exchanges is due to user not updating their slippage settings.
Some tokens require that you increase your Slippage Tolerance in the DEX settings to 10% to be able to execute a trade. This is common in meme coins like SAFEMOON, Dogelon Mars and others.
How to Fix the "Insufficient Liquidity for this Trade" error on Uniswap
If you are looking to trade altcoins or meme coins on Uniswap, Sushiswap or other decentralized exchanges, you may have come across the "Insufficient Liquidity for this Trade" error. It is one of the most common problems that new users have when using DEX's on Ethereum, Avalanche, Fantom and other chains.
The fix is simple, all you need to do it change your "Slippage Tolerance" on Uniswap or another DEX to 10 or 15%. You can do this by clicking the Setting button and changing the number from 1% as shown in the image below.
Why does Slippage effect Liquidity on Uniswap?
Slippage and liquidity don't necessarily relate to each other. Insufficient liquidity means that there is not enough "depth" to fill your order. For example, if you want to buy $10,000 of Shiba Inu tokens, but there is only $9,000 worth of SHIB tokens available on the market - that is insufficient liquidity.
Slippage on the other hand means the amount you're willing to lose to execute your order. For example, if you want to buy $10,000 of SHIB and set it to 10% slippage - it means that the order will execute with an allowance of 10% to be lost. This means you will get a minimum of $9,000 of SHIB tokens.
Should I trade coins with 10% Slippage Tolerance?
Trading low market cap coins on Uniswap, Trader Joe and other DEX's means that you may have to deal with up to 10 or 15% slippage. This is because the liquidity is low on these pairs to trade in or out of the token.
However, low liquidity means there is more upside as buys can have a large impact on the price. In summary - if you want to make big gains trading new coins, you will need to trade with up to 15% slippage tolerance.
Check depth to avoid Insufficient Liquidity error
If you want to analyse what tokens have sufficient, or insufficient liquidity to trade, you can check with Coingecko. Their platform allows you to assess every DEX (including PancakeSwap)and check the liquidity on each pair.
You can see an example of this below with the Uniswap and the liquidity on its pairs. For there to be sufficient liquidity, you want to see a number over $100,000 on the +2% or -2% depth columns as shown below.
Can you add liquidity to UniSwap?
Yes, if there is insufficient liquidity on a token pair you want to swap, you can add liquidity on UniSwap V3. In order to add liquidity to UniSwap, you will need to provide an even amount of tokens to a pool.
For example, if you want to add $1000 of liquidity to the ETH/USDC pair, you will need to add $500 of ETH and $500 of USDC to UniSwap.
The "insufficient liquidity for this trade" error is a common one on Uniswap, Sushiswap and other DEX's. It can be avoided by updating your slippage settings to 10 or 15%. If you are trading low market cap coins and tokens, you may need to accept up to 15% slippage in order to execute the trade.
You can also check liquidity on Coingecko and add your own tokens to Uniswap by adding an even amount of both tokens to the pool. With this knowledge, you should be able to trade safely and securely on decentralized exchanges like Uniswap.