What Is Slippage?

Slippage is the difference between the price you expect when you submit a trade and the price at which it actually executes. In crypto, slippage is common — and on illiquid tokens it can be expensive.

Why Slippage Happens

Between the moment you click "buy" and the moment the order fills, the market moves. On a busy exchange or a thin liquidity pool, your own order can push the price away from where it was when you clicked.

Types of Slippage

• Positive slippage: Your order fills at a better price than expected (rare, but possible).
• Negative slippage: Your order fills at a worse price than expected (the common case).

How to Reduce Slippage

• Trade more liquid assets with high volume and deep order books.
• Use limit orders instead of market orders when possible — a limit order will not fill beyond your set price (though it may not fill at all).
• On DEXs, set a slippage tolerance so the transaction reverts if the price moves too far.
• Split large orders into smaller pieces to reduce your own market impact.
• Avoid trading during extreme volatility.

A Simple Example

You submit a market order to buy a token showing $1.00. But the order book is thin, and your order sweeps through several price levels, filling at an average of $1.04. That 4% difference is slippage — you paid more than the screen showed.

Frequently Asked Questions

Is slippage a fee? No. Slippage is a price impact, separate from exchange or gas fees. Both can apply to the same trade.

Can I avoid slippage entirely? Only by using limit orders and accepting that they may not fill. Market orders always risk slippage.

Why is slippage worse on small tokens? Low liquidity means fewer resting orders, so your trade moves the price more.

Continue Learning

• Limit Orders vs Market Orders — How to control fill price
• Understanding Crypto Liquidity — The root cause of slippage
• Liquidity Pools Explained — How DEX slippage is set

This article is for educational purposes only and is not financial advice.