Slippage
Also known as: Price Deviation, Trade Execution Gap, Market Impact
The difference between the expected and actual price of a trade due to market movement or liquidity constraints.
Slippage in crypto trading refers to the difference between the expected price of a transaction and the price at which it is actually executed. This often occurs during high volatility or in low-liquidity environments, where order execution cannot match the desired price. In decentralized exchanges (DEXs), slippage can be influenced by automated market makers (AMMs) and pool depth. Traders often set a slippage tolerance to define the maximum acceptable difference. While small slippage is normal, high slippage can lead to unexpected losses or failed transactions.