Berps Developer Guides: Evaluate Trade Impact

As with trading on an AMM, large trades can result in a different execution prices compared to the market price. This price impact is explained in the Dynamic Spread section. In summary, the price impact of a trade is based on the following factors:

1. The size of the proposed trade
2. The open interest in the direction of the proposed trade
3. The 'depth' of the particular market (simulating orderbook liquidity)

Querying Price Impact

Price impact for proposed trades is obtained using the FeesMarkets contract, which is responsible for managing fees related to trading pairs. A TypeScript example showing how to query the price impact of a trade is shown below:

const { ethers } = require('ethers');

const FeesMarketsABI = ... // See below

const FEES_MARKETS_ADDRESS = "0xd8c63AA3B1dCBA8a8781bf9C4E3F8F06305a459d";

const signer = new ethers.Wallet(YOUR_PRIVATE_KEY, ETHERS_PROVIDER);

const feesMarketsContract = new ethers.Contract(FEES_MARKETS_ADDRESS, FeesMarketsABI, signer);

const { priceImpactP, priceAfterImpact } =
    await feesMarketsContract.getTradePriceImpact(
    openPrice, // Current market price (with 10 decimals precision)
    pairIndex, // Index of trading pair
    long, // True for long, false for short
    tradeOpenInterest, // Trade position size in HONEY (1e18)
    );

console.log(
    'Price Impact (%):',
    ethers.utils.formatUnits(priceImpactP, 10),
);
console.log(
    'Price After Impact:',
    ethers.utils.formatUnits(priceAfterImpact, 10),
);

ABI

The relevant part of the FeesMarketsABI containing the getTradePriceImpact function is as follows:

[
  {
    "type": "function",
    "name": "getTradePriceImpact",
    "inputs": [
      { "name": "openPrice", "type": "uint256", "internalType": "uint256" },
      { "name": "pairIndex", "type": "uint256", "internalType": "uint256" },
      { "name": "long", "type": "bool", "internalType": "bool" },
      {
        "name": "tradeOpenInterest",
        "type": "uint256",
        "internalType": "uint256"
      }
    ],
    "outputs": [
      { "name": "priceImpactP", "type": "uint256", "internalType": "uint256" },
      {
        "name": "priceAfterImpact",
        "type": "uint256",
        "internalType": "uint256"
      }
    ],
    "stateMutability": "view"
  }
]