What Is Slippage in Crypto? Meaning and Slippage Tolerance
Slippage: Slippage is the difference between the price you are quoted for a trade and the price at which the trade actually executes, caused by thin liquidity, trade size or fast price moves.
Key takeaways
- Slippage is the gap between the quoted price and the price your trade actually gets.
- Slippage tolerance is the maximum price move you accept; if the price moves more, the swap fails instead of filling.
- Memecoins have high slippage because their pools are small and their prices move fast; a high tolerance also gives sandwich bots more room.
Slippage is the difference between the price you are quoted and the price your trade actually gets. On memecoins it is often large, because pools are small and prices move in seconds. Your slippage tolerance decides how much of that move you accept.
How slippage works
Uniswap names four causes: fast markets, thin liquidity, large trades and MEV bots that front-run or sandwich large swaps (Uniswap). Slippage tolerance is the limit you set. If the price moves past it, the swap does not go through. Uniswap notes that a low tolerance risks failed swaps, and a high one risks a worse price.
Example: you buy $200 of a new memecoin with a 30% tolerance. Other buyers land first, and your order fills 25% above the quote. You now hold about 20% fewer tokens than the quote promised, before fees.
Why it matters for traders
On a small liquidity pool, slippage can cost more than the trading fee. A wide tolerance also gives a sandwich attack more room to profit from your trade. Split large orders, check the pool size, and start with a low tolerance. To see what trading fees add on top, try our fee calculator.