Significant figures, also known as the precision of a number in positional notation, are digits in the number that are reliable and necessary to indicate the quantity of something.
The precision level of all trading prices is calculated based on significant figures. Bitfinex uses five significant digits for the 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 is similar to how traditional global markets handle the precision of small, medium, and large values. The reasoning behind this is that the number of decimals becomes less important as the amount increases. The opposite is true for minimal amounts, where greater precision is more valuable.
If you have any questions, please feel free to reach out to Bitfinex Support. We are happy to help!