Slippage

Slippage is the gap between the price you saw when you started a trade and the price you got. It is a cost on top of explicit fees. Price impact is your own trade moving the market. On AMMs, larger trades walk further along the curve and get worse prices per extra unit.

Market movement slippage is the book moving while your transaction sits pending, worse in volatile markets and long mempool waits.

Impact scales with trade size versus pool size. A $10,000 swap in a $1 million pool is about 1% impact. 01%. Depth matters. DEX UIs show estimated slippage and let you set a max deviation. If realized slippage exceeds that, the trade reverts. Too tight a setting fails during volatility.

Too loose a setting invites sandwich attacks, where MEV bots trade ahead of you, worsen your price, and take the gap. Traders use private mempools, MEV protection, and limit orders to cut this cost. Slippage is the difference between the expected price of a trade when you initiate it and the actual executed price, representing one of the primary costs of trading beyond explicit fees.

Two types exist: price impact slippage occurs because your trade itself moves the market, on AMMs, larger trades move further along the bonding curve, receiving progressively worse prices for each additional unit. On an AMM, a larger swap moves the price more. The slippage setting is how far you allow that move before the transaction reverts.