Key Takeaways
Quick answer
Slippage is the difference between the price you expected for a trade and the price at which it actually fills. It happens when the market moves, or the volume available at your price runs out, between placing the order and its execution.
- Slippage is the gap between the price you expected and the price a trade actually fills at.
- It comes from price moves during execution and from thin liquidity at your price level.
- On DEXs a slippage tolerance rejects swaps outside your range, but the network fee is still paid.
Why does slippage happen?
On a platform with an order book, a buy at market takes the cheapest offers first. The SEC’s investor site gives a stock example: an order for 1,000 shares placed when the best offer is $3.00 may end up partly filled at a higher price if other orders get there first.
The SEC also notes that, once a stop order fires, the price you receive “can deviate significantly from the stop price due to the prices of available liquidity.” Both descriptions come from US stock regulators, but the mechanics are the same on crypto order books.
How does slippage work on a decentralised exchange?
Uniswap’s documentation puts it this way: “Slippage is the term we use to describe alterations to a given price that could occur while a submitted transaction is pending.” It treats price impact as a separate effect: your own swap shifts the pool’s price as it executes, and “The lesser the liquidity available, the higher the price impact.”
You therefore set a slippage tolerance. If the final price falls outside it, Uniswap says the transaction will fail and the swap will not occur, though the network fee is still spent (see gas fee).
What does slippage look like in numbers?
Illustrative only. You expect to buy 2 tokens at $50.00, so $100.00 in total. The average fill comes in at $50.60.
- Actual cost: 2 × $50.60 = $101.20
- Slippage: $101.20 − $100.00 = $1.20, or 1.2%
- With a 1% tolerance, the most you accept is $50.00 × 1.01 = $50.50 per token, so this swap would have been rejected.
How can you limit slippage, and what does it cost you?
A limit order fixes the worst price you will accept, but FINRA warns it may not execute at all. Smaller orders relative to the available liquidity move the price less. A very tight tolerance on a DEX protects the price but makes failed swaps more likely; a very loose one gives that protection away.
Frequently asked questions
Is slippage a fee?
Not in the sense of a charge on your statement. It is a price difference, but it raises the cost of a trade just as the spread and fees do.
Does a limit order stop slippage?
It stops you paying worse than your limit. The trade-off is that the order may sit unfilled if the market never reaches your price.
Article Sources
4 sources
Blockhorizon checks every figure, date and quotation against primary sources: regulators, statistics bodies and original technical documents. Read our editorial policy.
- Uniswap Labs documentation, Swaps (protocol concepts) — docs.uniswap.org (accessed 2026-10-02)
- SEC Investor.gov, Investor Bulletin: Understanding Order Types — investor.gov (accessed 2026-10-02)
- SEC Investor.gov, Investor Bulletin: Stop, Stop-Limit, and Trailing Stop Orders — investor.gov (accessed 2026-10-02)
- FINRA, Order Types — finra.org (accessed 2026-10-02)