Slippage: why your trade fills at a different price

You set a swap for a token at the price on your screen, tap confirm, and the amount that lands is slightly less than the quote promised. Nothing went wrong. You met slippage: the gap between the price you expected and the price you actually got. On a deep, busy market it is a rounding error. On a thin one it is the difference between a fair fill and a bad one, and it is worth understanding before you trade rather than after.

What is slippage?

Slippage is the difference between the price you expect for a trade and the price at which it actually executes. You see a quote, you commit, and by the time the order settles the available price has moved, so the fill lands a little above or below what you were shown. It happens in every market, from equities to foreign exchange to crypto, because a quote is a snapshot and execution takes a moment. In crypto the effect is often larger, since markets run around the clock across many venues and liquidity can be thin outside the largest tokens.

Why does slippage happen?

Slippage happens because the price you saw and the price you trade at are separated by time and by depth. In the moment between quote and execution, other orders arrive and the market moves; that is the time part. The depth part matters more: a market holds only so many orders sitting near the current price, and once your trade is large enough to eat through them it reaches into worse prices further out. A small order in a deep market barely moves the price; a large order in a thin one walks it as the trade fills.

Slippage on an order book versus an automated market maker (AMM)

The mechanism differs by where you trade, though the result feels the same. On a traditional order-book exchange, your order matches against resting buy and sell orders, and slippage is how far down or up the book your order has to reach to fill completely. On a decentralised exchange that uses an AMM, there is no order book: a formula prices each unit against a pool of two assets, and every unit you buy raises the price for the next unit. That built-in movement is called price impact, and it is slippage's on-chain cousin. Either way, the thinner the liquidity, the more the price moves against you.

What is slippage tolerance?

Slippage tolerance is a limit you set on how far the price may move before your trade is cancelled. Most decentralised-exchange interfaces let you set it as a percentage: a trade that would fill worse than that limit fails instead of executing at a bad price. Set it too tight and ordinary volatility cancels your trade repeatedly. Set it too loose and you authorise a fill far from the quote, which on a thin market or a volatile moment can cost real money. A wide tolerance also opens the door to a sandwich attack, where a bot sees your pending trade, pushes the price, and profits from the room your tolerance allowed.

How can you keep slippage small?

The main lever is size relative to liquidity. A trade that is small against a market's depth slips less than one that is large against a thin market, so the same order can be gentle on a top-tier token and punishing on an obscure one. Splitting a large order into smaller pieces over time can reduce the impact of any single fill. Trading the more liquid pairs, and during busier hours, tends to mean deeper books and less movement, though that is a tendency rather than a guarantee. And checking the estimated price impact an interface shows you before confirming turns a surprise into a decision.

Where does Northtape fit?

Northtape does not execute trades, quote prices or route orders. What it does is help you judge, before you trade, whether a market is deep enough to trade gently. Its market view covers the top-100 assets by market cap with 7-day sparklines, and it marks an asset "Tradeable" only when it sits in that top-100 and clears at least US$10M in 24-hour volume: a liquidity screen, not a recommendation. Thin liquidity is exactly what produces heavy slippage, so that marker is a rough first read on how forgiving a fill is likely to be. For the fuller picture, our note on liquidity (opens in a new tab) covers the number that decides whether you can sell at all.

FAQs

Is slippage the same as a trading fee? No. A fee is a fixed charge the exchange or network takes; slippage is the movement in the traded price itself. You can pay a low fee and still lose more to slippage on a thin market, so it helps to read both.

Can slippage ever work in my favour? Yes. Because the price can move either way between quote and fill, a trade sometimes executes slightly better than the quote. Positive slippage is real but not something to rely on.

Why is my slippage worse on a small-cap token? Small-cap tokens usually have thinner liquidity, so fewer orders sit near the current price and your trade reaches worse prices sooner. The same order size that barely moves a large-cap token can move a small one sharply.

What is a sandwich attack? It is a form of front-running on public blockchains: a bot spots your pending trade, buys ahead of it to push the price, lets your trade fill at the worse price, then sells. A tighter slippage tolerance limits how much room such an attack has.

None of this is investment advice. Slippage depends on live market depth that changes second by second, so treat any description here as how the mechanism works rather than a guide to a particular trade, and check the estimated price impact your own interface shows before you confirm.