What is crypto slippage?
Crypto slippage is the difference between the price you expect and the price your trade actually executes at.
The short version
Slippage happens when the market moves or there is not enough liquidity at your expected price. It is common on decentralized exchanges, small-cap tokens, volatile markets, and large orders. Even if the quoted fee is low, bad slippage can make the trade expensive.
DEX vs. CEX slippage
On a centralized exchange, slippage comes from the order book. On a decentralized exchange, it comes from pool liquidity, trade size, price impact, and your slippage tolerance settings. The same order can have very different execution quality across venues.
Price impact vs. slippage tolerance
Price impact is how much your own order moves the pool or order book. Slippage tolerance is the maximum worse price you allow before the trade fails. Raising tolerance can help a trade execute, but it can also expose you to worse fills or sandwich attacks on some decentralized exchanges.
When slippage gets dangerous
Slippage is most dangerous in thin markets, new tokens, meme coins, volatile launches, and during panic moves. If liquidity is shallow, a modest buy or sell can move the price sharply before your whole order is filled.
How to reduce it
Use limit orders when available, trade liquid pairs, avoid huge orders in thin markets, check price impact, split trades carefully, and avoid setting slippage tolerance higher than needed.
Related questions to ask AskClash
- What slippage tolerance should I use?
- Why did my DEX trade execute at a worse price?
- How is slippage different from trading fees?