What is Slippage?

Slippage is the gap between the quoted price when you submit a trade and the executed price when it settles. On a DEX, prices move as trades happen, and in a thin liquidity pool even a modest order can shift the price against you. Wallets let you set a slippage tolerance to limit how much movement you will accept.

This matters because unmanaged slippage can quietly cost you money, especially on low-liquidity tokens where a single trade meaningfully moves the price.

Example: you go to swap a token expecting a certain rate, but by the time the transaction confirms, the pool has shifted and you receive slightly less than quoted, the shortfall being slippage.

Safety note: setting slippage tolerance too high, especially on obscure tokens, exposes you to sandwich attacks where bots exploit the pending trade in the mempool. Setting it too low may cause the transaction to fail. Use modest tolerances, be extra careful with thin or new tokens, and treat a token demanding very high slippage to trade as a red flag for a scam or honeypot. Related terms include liquidity pool, DEX, MEV, and mempool.