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Blockchain & Crypto vocabulary · Exchanges & Trading

Slippage

Meaning in blockchain & crypto, with examples

/ˈslɪp.ɪdʒ/nounCommon term

In blockchain & crypto, slippage means: The difference between the price you expect when you place a trade and the price at which it is actually completed, usually caused by low liquidity or fast price moves.

In Turkish: kayma, fiyat kayması

How it is used

On decentralized exchanges you set a slippage tolerance, such as 0.5%; if the price moves more than that, the swap fails instead of going through. Large market orders on thin order books also suffer slippage. Setting the tolerance too high can expose a trade to front-running bots.

Example sentences

  1. The swap failed because the price moved more than my slippage tolerance.

  2. We split the big order into smaller ones to reduce slippage.

Common collocations

  • slippage tolerance
  • high slippage
  • reduce slippage
  • price slippage
  • liquidityHow easily an asset can be bought or sold quickly without moving its price much. In DeFi, it also means the funds that users deposit into pools so that others can trade.
  • decentralized exchangeAn exchange that runs on smart contracts, letting users trade directly from their own wallets without handing their funds to a company. Often shortened to DEX.
  • order bookA live list of all open buy and sell orders for a trading pair, sorted by price. It shows what buyers will pay, what sellers want and how much is available at each price level.
  • automated market makerA type of decentralized exchange that sets prices with a mathematical formula and trades against liquidity pools, instead of matching buyers and sellers in an order book.
  • liquidity poolA smart contract that holds two or more tokens which traders can swap against. Users who deposit tokens into it earn a share of the trading fees.

More terms: Exchanges & Trading

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