What is slippage?
Slippage occurs when the price of a trade changes between when you submit it and when it executes. On DEXs, this happens because the AMM's price changes as other trades execute in the same block.
Types of slippage
Price impact — your own trade moves the price. Larger trades relative to pool size cause more price impact.
Market slippage — other trades execute before yours, moving the price.
Slippage tolerance
DEX interfaces let you set a slippage tolerance — the maximum price movement you'll accept. If the actual slippage exceeds your tolerance, the transaction reverts.
- 0.1% — suitable for large, liquid pools (USDT/USDC)
- 0.5% — standard for most trades
- 1%+ — for illiquid tokens or large trades
Minimising slippage
- Trade in liquid pools — more liquidity = less price impact
- Split large trades — break into smaller transactions
- Use DEX aggregators — route across multiple pools
- Trade stablecoin pairs — USDT/USDC has near-zero slippage
Slippage in stablecoin pools
USDT/USDC pools have extremely low slippage because both tokens maintain the same $1 value. This is one reason the USDT/USDC pool on PancakeSwap V3 is so attractive for liquidity providers — high volume with minimal price impact.