Price Impact is the percentage difference between the last order price of a pair of assets and the price at which your order will be completed at.
Here’s an example:
Let’s say you want to convert 10 BTC to ETH, and currently, 1 BTC is equal to 2 ETH. So you should receive 20 ETH. Depending on your order's size, you might get something lower than that (for example, 16 ETH). This is because the network needs to complete your order according to the order books and the liquidity rates.
In the above example, the price impact will be 1 - (16 / 20), which is 0.2 or 20%.