Quick answer
Slippage is the difference between an expected trade price and the price or average price actually received.
What is Slippage?
Slippage occurs when market conditions, order size, latency, or an automated execution rule causes the final fill to differ from the quote. It can be positive or negative, but traders usually worry about paying more or receiving less.
The useful way to approach this term is to separate its definition from the assumptions people often attach to it. In crypto, the same word can appear in a protocol rule, a user interface, a market-data label, or a marketing claim. Check which layer the explanation is describing.
Why does slippage matter?
Slippage is especially important in thin markets and decentralized exchanges. A slippage tolerance can limit execution, but setting it too high may allow an unexpectedly poor fill.
Concrete example
See it in a real situation
A swap preview shows 1,000 tokens, but price movement and pool depth leave the user with 970 tokens. The difference may reflect price impact and slippage under the transaction’s rules.
Common misconceptions
What this term does not mean
- Slippage tolerance is not a fee and cannot make an unsafe contract safe.
- A low tolerance can cause a transaction to fail rather than guarantee a better price.
Related terms
Sources and further reading
Definitions are written for education and checked against the sources below where relevant. A source can explain a protocol or rule without endorsing every product built around it.