Slippage

Slippage is the difference between the expected price of a trade and the price at which it actually executes, expressed as an absolute price difference or a percentage of the trade value. More generally the word describes any gap between a planned and a realized outcome, but in markets it refers specifically to execution price.

How it works

A trade is sized and priced against a visible market state, such as an order book or a liquidity pool quote. Between the moment that state is observed and the moment the order fills, prices can change as other orders execute, quotes are withdrawn, or the order itself consumes available liquidity at successively worse prices. The realized fill price then departs from the reference price.

On automated market makers, slippage is a direct function of trade size relative to pool depth, because each unit traded moves the price along a bonding curve. Traders set a slippage tolerance that defines the worst acceptable price; if the fill would breach it, the transaction reverts. On order books, slippage comes from crossing multiple price levels and from latency between quote and execution. Positive slippage, a fill better than the reference, is also possible.

Why it matters

Slippage is a component of total execution cost alongside fees and spread, and it scales with order size, market depth, and volatility. For an institutional desk it determines how large a position can be moved without materially affecting the price received, which shapes order splitting, venue selection, and the choice between market and limit execution. Measuring realized slippage against a benchmark is a standard input to transaction cost analysis and to counterparty and venue evaluation. For how execution actually resolves onchain, see Mapping the Flow of DEX Swap Execution.

Related terms

• Price impact
• Slippage tolerance
• Bid-ask spread
• Transaction cost analysis
• Maximal extractable value

Frequently asked questions

What is the difference between slippage and price impact?

Price impact is the portion of slippage caused by your own order consuming liquidity and moving the price. Slippage is the broader gap between expected and executed price, which can also come from market movement and latency.

Can slippage be positive?

Yes. If the price moves favorably between quote and execution, the fill can be better than expected. This is called positive slippage and reduces execution cost.

What does slippage tolerance do on a decentralized exchange?

It sets the maximum price deviation you will accept. If the execution price would exceed that limit, the transaction reverts instead of filling at an unexpectedly worse price.

Allium provides onchain data infrastructure. Companies named in this article may be Allium customers, prospects or commercial counterparties. The authors and other Allium personnel may hold positions in the assets discussed. This article is informational only and is not investment, legal or tax advice. Data and information last reviewed: October 19, 2026.