Slippage

What is Slippage?

Slippage is the difference between the price you expect to pay and the price you actually get. It happens when there’s not enough liquidity at your expected price, or when prices move during transaction processing.

Slippage Example

Expected vs Actual

You want to buy 1 ETH:

• Expected price: $3,000
• Actual price: $3,015
• Slippage: $15 (0.5%)

You “slipped” to a worse price.

Causes of Slippage

Low Liquidity

• Not enough sellers at your price
• Order fills at worse prices
• Common with small coins

High Volatility

• Prices moving rapidly
• Market orders catch moving prices
• News events cause spikes

Large Order Size

• Exhausts liquidity at best price
• “Walks up” the order book
• Bigger trades = more slippage

Network Delays

• DEX transactions take time
• Price changes while pending
• Blockchain congestion worsens it

Slippage on CEXs vs DEXs

Centralized Exchanges

• Generally lower slippage
• Better liquidity
• Instant execution
• Order book model

Decentralized Exchanges

• Slippage more common
• AMM pricing mechanics
• Transaction confirmation delays
• Must set slippage tolerance

Slippage Tolerance Settings

On DEXs (Uniswap, etc.)

You set maximum acceptable slippage:

• 0.5% - Default, works for liquid pairs
• 1-3% - Lower liquidity pairs
• 5%+ - Very volatile or new tokens

Too Low Risk

Transaction may fail, still costs gas

Too High Risk

May get frontrun or bad execution

Calculating Slippage

Formula

Slippage % = ((Actual - Expected) / Expected) × 100

Example

• Expected: $100
• Actual: $102
• Slippage: (($102 - $100) / $100) × 100 = 2%

Minimizing Slippage

Use Limit Orders

• Specify exact price
• No slippage (but may not fill)
• Available on CEXs and some DEXs

Trade Liquid Pairs

• Stick to major cryptocurrencies
• Use high-volume exchanges
• Check order book depth

Split Large Orders

• Break into smaller pieces
• Execute over time
• Reduces market impact

Time Your Trades

• Avoid volatile periods
• Check gas prices on DEXs
• Use quiet market hours

Use Aggregators

• DEX aggregators find best routes
• Split across liquidity sources
• Examples: 1inch, Jupiter

Slippage Impact by Trade Size

Trade Size	BTC/USDT	Small Altcoin
$1,000	~0%	0.5-1%
$10,000	~0%	2-5%
$100,000	0.1%	10%+

Approximate - varies by market conditions

Negative Slippage (Positive for You)

Can Happen When

• Price moves favorably during execution
• DEX gives better rate than quoted
• Market improves while pending

Less Common Because

• Market makers arbitrage quickly
• Prices usually move against you

Slippage in Different Market Conditions

Normal Markets

• Predictable slippage
• Order books stable
• Use standard settings

Volatile Markets

• Slippage increases dramatically
• Order books thin out
• Consider waiting

Flash Crashes

• Extreme slippage possible
• Stop losses may execute poorly
• Liquidity disappears temporarily

Platform-Specific Tips

Binance

• High liquidity, low slippage
• Use limit orders
• See Binance fees

Coinbase

• Good liquidity for major pairs
• Advanced Trade has limit orders
• See Coinbase fees

DEXs

• Always check slippage settings
• Verify price before confirming
• Use aggregators for large trades

Frontrunning and Slippage

What is Frontrunning?

Bots see your transaction, execute ahead:

• Buy before you buy
• Sell to you at higher price
• Profitable for bot, costly for you

Protection

• Use low slippage tolerance
• Private RPCs (Flashbots)
• MEV-protected swaps