What Is Slippage in Crypto? A Simple Guide for Traders
Slippage is the difference between an expected price and the executed price. Learn why it happens, how to estimate it and when high slippage is a warning.
In this article
Quick answer: Slippage is the gap between the price you expect and the price your trade receives. It increases when liquidity is thin, orders are large, markets move quickly or a decentralised exchange has a low-depth pool. A high slippage setting can make a trade execute at a much worse price.
Slippage is different from the visible network fee. Gas pays for execution, while slippage reflects how the market price changes while the order is filled.
Why slippage happens
Automated market makers price trades against pool balances. A large order changes those balances and moves the price along the curve. In an order book, the order consumes available bids or asks. Volatility and latency can add another difference between quote and execution.
How to reduce slippage
- Use deeper, more liquid markets.
- Reduce order size or split a large trade.
- Compare routes and check price impact before confirming.
- Set a slippage limit that allows normal movement but rejects surprises.
- Avoid rushing during sudden market spikes.
When high slippage is a warning
A very high required setting may indicate a tax token, low liquidity, a honeypot or a broken route. Do not simply raise the tolerance until the transaction succeeds. Investigate why the quote is poor.
FAQ
Can slippage be negative?
You can receive a better execution than quoted, although interfaces usually show the maximum adverse tolerance.
What is a reasonable slippage limit?
There is no universal number. Use the smallest tolerance that fits the asset, market depth and volatility.
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