What Is Slippage? Definition, Example and How to Reduce It

By Gurjeet Singh, developer of CoinPriceAlert · Published 30 August 2026 · 3 min read

The definition

Slippage is the difference between the price you expected and the price you got.

Definitions in crypto are often circular or full of jargon. If you understand only that sentence, you already know more than most people using the term.

Why it matters to you

In practice, it is a hidden cost that grows with order size and shrinking liquidity.

The concepts that affect your decisions are worth understanding properly; the rest is trivia.

The part people get wrong

One important nuance: it is usually worst during the volatile moments you most want to trade.

Most costly mistakes in crypto come from a half-understood concept rather than a completely unknown one.

What slippage is, with an order book in front of you

Slippage is the gap between the price you expected and the price you got. It happens because an order book is a ladder, not a single number. Suppose the best ask for a small-cap is $2.00 with 3,000 tokens available, then $2.02 with 5,000, then $2.05 with 10,000. A market buy of $30,000 sweeps through all three levels and averages around $2.03, about 1.5% above the price you saw on the ticker.

It is measured in percent or basis points, and it grows with two things: the size of your order relative to the depth of the book, and how fast the market is moving while your order travels. A quiet large-cap on a weekday shows almost none. A thin token on a Sunday night can slip several percent on a modest order.

Slippage tolerance on decentralised exchanges

On a DEX such as Uniswap there is no order book, only a pool, and the price moves along a curve as you trade against it. The interface asks for a slippage tolerance, often defaulting near 0.5%, and rejects the swap if the executed price would be worse. Set it too tight and swaps fail during volatility; set it too loose and you invite sandwich attacks, where a bot places a trade before yours to push the price up and another after it to sell back, pocketing the difference you allowed.

The tolerance is not a target. It is the worst case you authorise, and bots read it as such.

How to keep it small

Use limit orders for anything that is not urgent; a limit order cannot slip because it cannot fill worse than its price. Split large orders into pieces over time, or use an exchange's TWAP tool that does it for you. Trade liquid pairs during liquid hours, and check the 24-hour volume against your order size before you send it. If your order is a meaningful fraction of a percent of daily volume, expect the book to notice.

Alerts help here in a way that is easy to miss. Slippage is worst when you are chasing a move that already happened. A percentage alert tells you about the move when it starts, so the decision is made against a calmer book, and a price alert at your level lets you place a limit order rather than hitting the market in a panic.

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Related terms

• Liquidity — how easily an asset can be bought or sold without moving its price
• Order Book — the live list of buy and sell orders waiting at each price level
• Limit Order — an instruction to buy or sell only at a specified price or better

Sources

• Binance Academy: What is slippage in crypto?
• Uniswap docs: Swaps

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