Price volatility refers to the rapid and significant changes in asset prices due to a lack of liquidity. In trustless bridges, price volatility can occur when:

1. There are few buyers or sellers, leading to a lack of market depth.

2. Orders are large compared to the available liquidity, causing prices to swing rapidly.

3. Market participants react to news or events, leading to sudden and drastic price movements.

Price volatility can result in:

1. Unpredictable and unstable prices.

2. Increased risk for users, especially those using leverage or margin.

3. Reduced trust and confidence in the trustless bridge.

4. Increased transaction costs and slippage.

5. Decreased liquidity, as participants become hesitant to trade in volatile markets.

To mitigate price volatility, trustless bridges can implement measures such as:

1. Liquidity incentives to attract more participants.

2. Market making and liquidity provision.

3. Price stabilization mechanisms, like oscillators or dampeners.

4. Risk management tools, like stop-loss orders or position limits.

5. Education and awareness campaigns to promote market understanding and stability.