How to manage price precision with a DEX orderbook?

Suppose a DEX used an orderbook per pair of tokens as our setup, here's what I can see as problems with pricing precision:

An extremely high precision would give a nasty looking orderbook, and maybe more issues. Too strict of precision might create scenario where the volatility in pricing makes the lowest decimal a significant percentage jump in price.

The latter could potentially have an algorithm with dynamically changes the precision potentially.

Does anyone have any thoughts or experience with this?