Tokens – How to Get Token Price from Pancakeswap?

bscpancakeswaptokenstxpool

Actually i was wondering how to retrive the price of a low cap token from pancakeswap without having to use sites like poocoin/dextools directly.

I understood this,

U can use the pancakeswap api here, but it doesn't work for every token
U can use directly the token pool contract on bsc to retrive the price ( in this example assuming that the pool is BNB/Your token )

I'm going for the second way becouse it works for all the tokens, this is what I did:

I red the main pancakeswap contract ( 0x10ED43C718714eb63d5aA57B78B54704E256024E ) and found this function used to calculate the price of tokens in output

function getAmountOut(uint amountIn, uint reserveIn, uint reserveOut) internal pure returns (uint amountOut) {
        require(amountIn > 0, 'PancakeLibrary: INSUFFICIENT_INPUT_AMOUNT');
        require(reserveIn > 0 && reserveOut > 0, 'PancakeLibrary: INSUFFICIENT_LIQUIDITY');
        uint amountInWithFee = amountIn.mul(9975);
        uint numerator = amountInWithFee.mul(reserveOut);
        uint denominator = reserveIn.mul(10000).add(amountInWithFee);
        amountOut = numerator / denominator;
    }

I converted the upper function in a javascript normal function to use it directly.

function calcPriceInBnb( amountIn, reserveIn, reserveOut ){
    let amountInWithFee = amountIn *  9975 ;
    let numerator = amountInWithFee * reserveOut ;
    let denominator = ( reserveIn * 10000 ) + amountInWithFee ;
    console.log( numerator, denominator)
    amountOut = numerator / denominator;
    return amountOut;
}
console.log( calcPriceInBnb (
        1,
        parseFloat(reserves_._reserve1),
        toBaseUnit(reserves_._reserve0, 18, web3.utils.BN)
    ) ) // usage example

now on the token pool (0x1d42d057b765177298735c8d9f36b8208449dbb3) I'm calling the function to retrive the pool reserves

function getReserves() external view returns (uint112 reserve0, uint112 reserve1, uint32 blockTimestampLast);

Once that i have the reserves i call calcPriceInBnb(1, reserve1, reserve0) that returns the token price in BNB and from this i have only to convert the BNB value to USD.

There is only one problem that i'm finding, when i get the reseves from the pool i get a non floating number.

For example: I saw that dextools.io uses the same method to calculate the token's price, inspecting the requests on the website it uses json bojects with the following keys

{
   "data":{
      "pair":{
         "token0":{
            "_id":"6096efc237e2488af0c1ea10",
            "id":"0x4a824ee819955a7d769e03fe36f9e0c3bd3aa60b",
            "name":"Kabosu",
            "symbol":"KABOSU",
            "decimals":9
         },
         "token1":{
            "_id":"6096efc237e2488af0c1ea11",
            "id":"0xbb4cdb9cbd36b01bd1cbaebf2de08d9173bc095c",
            "name":"Wrapped BNB",
            "symbol":"WBNB",
            "decimals":18
         },
         "info":{
            "address":"0x4a824ee819955a7d769e03fe36f9e0c3bd3aa60b",
            "holders":121190
         },
         "_id":"6096efc237e2488af0c1ea0f",
         "id":"0xa17d2c8b629095672633828d744a03608bbaae24",
         "createdAtTimestamp":1620504512,
         "exchange":"pancakev2",
         "type":"standard-pair",
         "tokenIndex":0,
         "__v":0,
         "initialReserve0":365615229923141.8,
         "initialReserve1":208.675,
         "creation":{
            "blockNumber":"7250792",
            "timeStamp":"1620504512",
            "hash":"0x4d1e5b7082d0a92885cad5a7047b2693c7e2790be0c591a622d602ef7318b3be",
            "nonce":"0",
            "blockHash":"0x7bdf8d219600934504103326070861fd3c99fefcbc9535592e042dd369686996",
            "transactionIndex":"213",
            "from":"0xb56fd23449d66a10251e7efa778c944c4ba96666",
            "to":"",
            "value":"0",
            "gas":"5956167",
            "gasPrice":"5000000000",
            "isError":"0",
            "txreceipt_status":"1",
            "input":"",
            "contractAddress":"0x4a824ee819955a7d769e03fe36f9e0c3bd3aa60b",
            "cumulativeGasUsed":"32279124",
            "gasUsed":"5956167",
            "confirmations":"235853"
         },
         "reserve0":165371362282732.84,
         "reserve1":7691.065744229067,
         "reserveUpdatedAt":1622012556573,
         "txCount":244654
      }
   }
}

As you can see at the end of the object there are two fields reserve0=165371362282732.84 and reserve1=7691.065744229067 that are floating numbers, if used in the calcPriceInBnb this numbers returns the correct price of the token.

Let's assume that i query the bsc pool contract in the same moment, instead of that values i would get reserve0=16537136228273284, reserve1=7691065744229067 ( non float numbers ) and this bring me to wrong calc.

I thought that this had to do with the decimals of the tokens in the pool but didn't find correlations. Any idea?

UPDATE

I made a gist on github about it https://gist.github.com/Linch1/ede03999f483f2b1d5fcac9e8b312f2c

Best Answer

You do not need to go through this hassle, you can use getAmountsOut on the PancakeSwap router contract to make this a lot simpler. You provide a path&amount of the first token in the path to use, and the function returns the token quantity you would receive at that moment. You can then use this data for price calculation.

Short answer

Given a liquidity pool with token A and token B, let:

reserve_a_initial be the amount of token A in the liquidity pool before the trade
reserve_b_initial be the amount of token B in the liquidity pool before the trade (not required to calculate the price impact)
fee be the trading fee. For PancakeSwap, this is 0.0025
amount_traded be the amount of token A traded

To calculate the price impact:

amountInWithFee = amount_traded * (1 - fee);
price_impact = amountInWithFee / (reserve_a_initial + amountInWithFee);

Explanation

This article explains how to calculate the price impact. However, please note that what the article refers to as the "current market price" or "market rate", I refer to as the mid_price. Now, let's calculate the price_impact:

constant_product = reserve_a_initial * reserve_b_initial;
reserve_b_after_execution = constant_product / (reserve_a_initial + amountInWithFee);
amountOut = reserve_b_initial - reserve_b_after_execution;
market_price = amountInWithFee / amountOut;
mid_price = reserve_a_initial / reserve_b_initial;
price_impact = 1 - (mid_price / market_price);

Before substituting and simplifying, let:

reserve_a_initial be $r_{a0}$
reserve_b_initial be $r_{b0}$
reserve_b_after_execution be $r_{b1}$
amount_traded be $a_{traded}$
fee be $f$
amountInWithFee be $a_{in}$
constant_product be $k$
amountOut be $a_{out}$
market_price be $p_{market}$
mid_price be $p_{mid}$
price_impact be $price_{impact}$

Now for the math:

$a_{in} = a_{traded}(1-f)$

$k = r_{a0} \cdot r_{b0}$

$r_{b1} = \frac{k}{r_{a0} + a_{in}} = \frac{r_{a0} \cdot r_{b0}}{r_{a0} + a_{in}}$

$a_{out} = r_{b0} - r_{b1} = r_{b0} - \frac{r_{a0} \cdot r_{b0}}{r_{a0} + a_{in}} = \frac{r_{b0}(r_{a0} + a_{in}) - r_{a0} \cdot r_{b0}}{r_{a0} + a_{in}} = \frac{r_{b0} \cdot a_{in}}{r_{a0} + a_{in}}$

$p_{market} = \frac{a_{in}}{a_{out}} = a_{in} \div \frac{r_{b0} \cdot a_{in}}{r_{a0} + a_{in}} = \frac{r_{a0} + a_{in}}{r_{b0}}$

$p_{mid} = \frac{r_{a0}}{r_{b0}$

$price_{impact} = 1 - \frac{p_{mid}}{p_{market}} = 1 - \frac{r_{a0}}{r_{b0}} \div \frac{r_{a0} + a_{in}}{r_{b0}} = 1 - \frac{r_{a0}}{r_{a0} + a_{in}} = \frac{a_{in}}{r_{a0} + a_{in}}$

I found this mind-blowing, but the amount of token B in the pool doesn't affect the price_impact. However, reserve_b_initial will affect amount_out.

Calculating `amount_traded` given the `price_impact`

Rearranging the price_impact equation, it is possible to calculate amount_traded for a given price_impact:

$a_{traded} = \frac{r_{a0} \cdot price_{impact}}{(1 - price_{impact})(1-f)}$

Slippage and minimum amount received

To account for slippage, s, and calculate the minimum received, amount_out_min:

amount_out_min = amount_out * (1 - s);

Slippage does not affect price_impact.

Sample code

I don't know if there's a function in a PancakeSwap contract that will directly return the price_impact, but you can get the reserves of a pool and then calculate it. Let's take CAKE-USDT as an example:

import { Contract, utils, providers } from 'ethers';
const poolAddress = '0xa39af17ce4a8eb807e076805da1e2b8ea7d0755b'; // CAKE-USDT
const poolContract = new Contract(
    poolAddress,
    ['function getReserves() public view returns (uint112 _reserve0, uint112 _reserve1, uint32 _blockTimestampLast)'],
    new providers.WebSocketProvider(PROVIDER_URL)
);

poolContract.getReserves()
    .then((reserves) => {
        let reserve_a_initial = parseFloat(utils.formatUnits(reserves._reserve0));
        let reserve_b_initial = parseFloat(utils.formatUnits(reserves._reserve1));
        console.log(`CAKE in pool: ${reserve_a_initial}`);
        console.log(`USDT in pool: ${reserve_b_initial}`);

        const fee = 0.0025;
        let max_price_impact = 0.01;
        let amount_traded_cake = reserve_a_initial * max_price_impact / ((1 - max_price_impact)*(1 - fee));
        let amount_traded_usdt = reserve_b_initial * max_price_impact / ((1 - max_price_impact)*(1 - fee));
        console.log(`Given a max price impact of ${max_price_impact*100}%, the max amount of CAKE tradeable is ${amount_traded_cake}`);
        console.log(`Given a max price impact of ${max_price_impact*100}%, the max amount of USDT tradeable is ${amount_traded_usdt}`);

        let amountInCAKE = amount_traded_cake * (1 - fee);
        let amountInUSDT = amount_traded_usdt * (1 - fee);
        let price_impact_trade_cake = amountInCAKE / (reserve_a_initial + amountInCAKE);
        let price_impact_trade_usdt = amountInUSDT / (reserve_b_initial + amountInUSDT);
        console.log(`Price impact when trading ${amount_traded_cake} CAKE: ${price_impact_trade_cake*100}%`);
        console.log(`Price impact when trading ${amount_traded_usdt} USDT: ${price_impact_trade_usdt*100}%`);
    }).catch(console.error);

Sample results:

CAKE in pool: 1030240.4016832297
USDT in pool: 19974605.474162016
Given a max price impact of 1%, the max amount of CAKE tradeable is 10432.550079068678
Given a max price impact of 1%, the max amount of USDT tradeable is 202269.36507087937
Price impact when trading 10432.550079068678 CAKE: 1%
Price impact when trading 202269.36507087937 USDT: 1%

Please note that the price shown on the PancakeSwap UI is the execution_price:

execution_price = amount_traded / amountOut;

UPDATE

Best Answer

Related Solutions

[Ethereum] Retrieve price data from PancakeSwap [BSC]

[Ethereum] Understand price impact and liquidity in pancakeswap

Short answer

Explanation

Calculating amount_traded given the price_impact

Slippage and minimum amount received

Sample code

Related Topic

Calculating `amount_traded` given the `price_impact`