⚡ TL;DR – What Is Slippage in Crypto?
Slippage is the difference between the expected price of a trade and the actual price it’s executed at. It usually occurs in volatile markets, with low liquidity, or during large trades — and affects both buyers and sellers. In crypto, slippage is especially common on DEXs, where price impact and real-time demand play a major role.
❓ Slippage: What It Means in Crypto Trading
In simple terms, slippage happens when you don’t get the price you were hoping for.
You might try to buy a token at $1.00, but by the time the transaction is confirmed, you end up paying $1.03. That 3% difference is positive slippage (if you benefit) or negative slippage (if you lose out).
Slippage affects:
- Market orders on centralized exchanges (CEXs)
- Swaps on decentralized exchanges (DEXs)
- Large trades in illiquid markets
- Rapid price movements (volatility)
It’s a normal part of trading, but if unmanaged, it can eat into profits — or cause losses.
Why Does Slippage Happen?
Several factors contribute to slippage:
- Price volatility – When prices change rapidly between order placement and execution
- Low liquidity – Few tokens in the pool = bigger price impact
- Large order size – Your trade affects the price by consuming multiple levels of liquidity
- Slow transaction confirmation – Especially common on DEXs with block delay
In short, the market “moves” before your order can settle.
Slippage on CEXs vs DEXs
| Exchange Type | How Slippage Occurs | Typical Cause |
|---|---|---|
| CEX | Market orders executed through order book | Thin books, big orders, volatility |
| DEX | Price changes due to AMM curve mechanics | Pool depth, token imbalance, MEV bots |
On DEXs like Uniswap, SushiSwap, or Jupiter, slippage is managed via slippage tolerance settings, which you can adjust in your wallet or swap interface.
Slippage Tolerance: What You Should Know
Slippage tolerance defines how much price change you’re willing to accept between initiating and executing a trade.
- Set too low → your transaction may fail
- Set too high → you risk getting front-run or overpaying (especially with MEV bots)
Typical settings:
- 0.1–0.5%: Stablecoin trades with low volatility
- 1–3%: Standard altcoin swaps
- 5%+: Small caps, memecoins, high-volatility assets
Always adjust slippage depending on the asset, volume, and urgency.
How to Minimize Slippage
- Trade during high-liquidity hours
- Use limit orders on CEXs
- Split large trades into smaller ones
- Avoid chasing pumps or volatile memecoins
- Monitor gas speed and use fast confirmations
- Use aggregators like 1inch, Matcha, or Jupiter to find best routing
Being proactive can help you control cost and reduce execution risk.
Example of Slippage in Action
You want to swap 1 ETH for 1000 USDC.
By the time your trade is confirmed, market conditions change — and you receive only 980 USDC.
That’s 2% slippage. Depending on your settings, this could either go through — or fail.
🔑 Key Takeaways
- Slippage is the price difference between expected and actual trade execution.
- It’s caused by market volatility, liquidity depth, and order size.
- Traders can set slippage tolerance to control trade behavior.
- While slippage can’t be fully avoided, it can be minimized with smart strategy.
❓ Frequently Asked Questions About Slippage
It’s the difference between the price you expect and the price you actually get when a trade executes.
Not always — it can be positive. But in most cases, especially with DEXs, it results in slightly worse trade execution.
For liquid assets: 0.1–1%. For volatile or low-liquidity tokens: 2–5% or more. Always set based on the token and platform.
If the price moves outside your allowed slippage range before the trade confirms, the transaction is automatically reverted.
Yes. MEV (Miner Extractable Value) bots on DEXs may front-run or sandwich trade users who set high slippage tolerances.
