What is Slippage


Slippage is the difference between the expected price of a trade and the actual price at which the trade is executed. It occurs when there is a delay between the time a trade is ordered and the time it is executed, during which the price of the asset being traded changes.

For example, if you place an order to buy a Bitcoin at $50, but the price jumps to $52 before your order is executed, you may experience a slippage of $2 per share. This means that your actual purchase price will be $52 instead of the expected $50.

Another example will be: if you find an AMM pool consists 20 ETH and 80 USDT like the above, your expected price of ETH in this pool is 4 USDT per ETH. However, if you plan to swap 20 USDT, you will only get 4 ETH rather than 5, and you may experience a slippage of 1 USDT per ETH. This means your actual purchase price will be 5 USDT instead of the expected 4 USDT.

Slippage is particularly common in fast-moving markets or with high volatility assets, such as cryptocurrencies, or long-tailed assets with limited liquidity, such as cryptocurrencies😂.......

Anyway, it can have a significant impact on trading performance and is important to consider when placing orders.



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