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PRICE_IMPACT_FEATURE.md

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Price Impact Calculation Feature

Overview

This feature implements a price impact estimation endpoint for the TradeFlow API. It calculates the potential slippage a user might experience when trading large amounts of tokens.

Implementation Details

Endpoint

  • URL: POST /api/v1/swap/estimate
  • Description: Estimates price impact based on trade amount

Request Body

{
  "amountIn": 5000
}

Response Format

{
  "amountIn": 5000,
  "priceImpact": "1.33%",
  "timestamp": "2024-01-15T10:30:00.000Z"
}

Business Logic

  • amountIn < 1000: Returns 0.1% price impact
  • amountIn > 10000: Returns 2.5% price impact
  • 1000 ≤ amountIn ≤ 10000: Linear interpolation between 0.1% and 2.5%

Error Handling

  • Invalid (negative or zero) amounts return 400 Bad Request

Files Created/Modified

New Files

  1. src/swap/swap.controller.ts - REST controller with Swagger documentation
  2. src/swap/swap.service.ts - Business logic for price impact calculation
  3. src/swap/swap.module.ts - NestJS module configuration
  4. test-swap-endpoint.js - Test script for endpoint validation

Modified Files

  1. src/app.module.ts - Added SwapModule to imports

Testing

Manual Testing

  1. Start the server: npm run start:dev
  2. Run the test script: node test-swap-endpoint.js

Test Cases

  • Small trade (500): Expected 0.1%
  • Large trade (15000): Expected 2.5%
  • Medium trade (5500): Expected ~1.33% (interpolated)
  • Invalid input (-100): Expected 400 error

API Documentation

The endpoint is fully documented with Swagger annotations and available at /api/docs when the server is running.

Future Enhancements

  • Real pool size integration
  • Dynamic price impact calculation based on liquidity
  • Multi-token support
  • Historical price impact tracking