The coin isn't a honeypot, the tax is low, the chart says $40,000 of liquidity. You sell $5,000 and get back $4,000. Nothing was broken. You just sold into a pool that was smaller than you thought, and the pool charged you for it. Here's how to work out that number before you buy, not after.
Price impact is the difference between the price shown before your trade and the average price you actually get, caused by your trade itself. A DEX pool has no order book. It prices every trade off its own reserves, so each token you sell in makes the next one cheaper.
It's mechanical and known before you sign. The swap screen shows it as "price impact", and it depends on only two things: the size of your trade and the depth of the pool.
No, and mixing them up is how people lose money with a "1% slippage" setting. Price impact is the move your own trade causes against the pool as it is right now. Slippage tolerance is the extra move you'll accept between the quote and the moment your trade lands, because other trades can hit the pool first.
A 30% price impact with 1% slippage tolerance still costs you 30%. The tolerance only stops it getting worse. A wide tolerance on a busy coin is also what lets a sandwich bot buy in front of you, which is covered in how to copy trade safely.
On a constant-product pool (Uniswap v2 style, PancakeSwap v2, Raydium standard pools) the formula is short. If the pool holds B dollars of the base asset (ETH, BNB, SOL, USDC) and you sell tokens worth S dollars at the current price, you get back B x S / (B + S). Your loss is S / (B + S).
For small sells that's almost exactly your sell size as a share of the base side. Here is a pool with $20,000 of base asset on one side, before the pool fee and any token tax:
| You sell (at shown price) | You get back | Lost to price impact | Price after your sell |
|---|---|---|---|
| $500 | $488 | 2.4% | -4.8% |
| $1,000 | $952 | 4.8% | -9.3% |
| $2,000 | $1,818 | 9.1% | -17.4% |
| $5,000 | $4,000 | 20% | -36% |
| $20,000 | $10,000 | 50% | -75% |
The last column is the tell people miss. Your $5,000 sell drops the chart 36%, and every other holder now sees a red candle. If you're early and size big, your own exit is the dump.
Because chart sites usually report liquidity as both sides of the pool added together. That $20,000 pool above shows as about $40,000 of liquidity, and half of it is the memecoin itself, valued at its own price. When you sell, you're only paid out of the base side.
So the first move is to halve the displayed number. Then remember the base side only shrinks as other holders sell ahead of you. A pool that's $20,000 deep when you buy can be $8,000 deep by the time you want out, which is the same exit liquidity problem that makes a wallet's unrealised PnL look better than it is.
On Robinhood Chain and ARC, MoonRadar probes real sell sizes against the actual pool on-chain and tells you roughly how many dollars you can sell before the price collapses. It doesn't use the chart site's liquidity figure, which over-states and lags. A coin that shows big liquidity but has almost no real exit money is caught and hidden from the radar, and pools that were seeded then drained are removed automatically. The Robinhood Chain guide has a worked example where every other check passes and the exit is about $50.
Exit depth sits in the Safety Grade next to the sell test, buy and sell tax, owner status and who controls the supply. Liquidity is measured on every scan across HOOD, BNB, ARC and Solana. The scan is free, needs no sign-up, and is non-custodial: you sign every trade in your own wallet. A deep pool tells you that you can get out. It doesn't tell you the coin will be worth getting out of.
Check a token's real exit on MoonRadar