Slippage
The difference between the expected price of a trade and the actual executed price.
In-Depth Explanation
Slippage occurs due to price movement between submission and execution, or from trade size moving the market. In AMMs, larger trades have more slippage due to the bonding curve. Slippage tolerance settings protect against excessive slippage but may cause failed transactions if set too tight.
Related Terms
Automated Market Maker
AMMA smart contract that provides liquidity and enables trading using a mathematical formula instead of an order book.
Liquidity
The ease with which an asset can be bought or sold without significantly affecting its price.
Price Impact
The effect a trade has on the market price of an asset, proportional to trade size relative to liquidity.
More in Trading & Markets
View all →Maximal Extractable Value
MEVValue that can be extracted by reordering, inserting, or censoring transactions within a block.
Sandwich Attack
An MEV extraction technique where an attacker places transactions before and after a victim's trade to profit from the price impact.
Frontrunning
Placing a transaction ahead of a known pending transaction to profit from the anticipated price movement.
Arbitrage
Profiting from price differences of the same asset across different markets or venues.