The precision level of all trading prices is calculated based on significant figures.

We use 5 significant digits for prices of all pairs on Bitfinex. Some examples of five significant digits are 1.0234, 10.234, 120.34, 1234.5, 0.012345, and 0.00012340.

This mimics how traditional global markets dynamically handle precision of small, medium, and large values. The rationale behind this is that the higher the amount, the less relevant the number of decimals becomes. The corollary is true for very small amounts, where more precision is more useful.