How Do Large “Whale” Trades Exploit Low Liquidity to Cause Significant Slippage and Profit from It?

In low-liquidity pools, a whale trade (a very large order) can significantly shift the token ratio, causing massive slippage for that trade and subsequent ones. The whale may execute a large buy to pump the price, causing other traders to buy at the inflated price, or a large sell to crash it.

They profit by taking advantage of the dramatic, self-inflicted price movement, often through coordinated transactions that capitalize on the price shock.