Slippage
Slippage is the difference between the price you expected for a trade and the price at which it actually executed. It usually works against you, especially with large orders or in thin, fast-moving markets.
Why slippage happens
On an exchange with an order book, a market order fills against the best available offers. If your order is bigger than the volume at the best price, it continues to the next, worse price levels. Your average price drifts away from the quoted price.
Slippage also comes from time. Between the moment you click and the moment your order is processed, the market can move. On a blockchain this delay can be several seconds or longer, because a transaction must wait to be included in a block.
Slippage on decentralized exchanges
On a DEX that uses an automated market maker, you trade against a liquidity pool. Every trade shifts the ratio of tokens in the pool and therefore the price. The larger your trade compared to the pool, the stronger this price impact.
DEX interfaces let you set a slippage tolerance, for example 0.5 percent. If the final price would be worse than that, the transaction fails instead of executing. A very high tolerance makes you an easier target for sandwich attacks, where a bot trades right before and after you to profit from your price impact.
An example
Say you want to buy 1,000 USDC worth of a small token quoted at 1.00. The pool is shallow, so your trade pushes the price up as it executes, and you receive tokens at an average of 1.03. That 3 percent difference is slippage, on top of any fees.
How to reduce it
Use limit orders when the price matters more than speed, split large orders into smaller ones, and prefer markets with deep liquidity. On DEXs, keep slippage tolerance as low as practical and check the minimum amount you will receive before confirming.
Ask Coach about it
Coach is the AI on AtenaCrypto. It explains crypto with live market data, in plain words.
How can I estimate the slippage of a trade before I send it on a DEX?Ask Coach →
Frequently asked questions
Can slippage be positive?
Yes. If the price moves in your favour before execution, you can get a better price than expected. In practice, negative slippage is more common for market orders.
What slippage tolerance should I set on a DEX?
There is no universal number. Liquid pairs often work with a small tolerance, while volatile or thin tokens may need more. Higher tolerance raises the risk of a worse fill and of being front-run.
Is slippage the same as a fee?
No. Fees are charged by the platform or network. Slippage is a price difference caused by market movement and limited liquidity, although both raise your total trading cost.
Related terms
Learn it step by step
AC Learning explains these ideas in interactive lessons — the first eight sections are free.
Open AC Learning → Create a free accountAll glossary terms · Educational reference only — not investment, legal, tax or financial advice.