Slippage
The difference between the price you expect for a trade and the price you actually get when it is executed.
Slippage is the gap between the quoted or expected price of a crypto trade and the final price at which it executes. It commonly happens on decentralized exchanges because prices can move between the moment you submit a swap and the moment it is confirmed on-chain. It can also occur when a trade is large compared with the liquidity in a pool, causing the trade itself to move the price. Slippage may be negative, where you receive less than expected, or positive, where you receive more.
It matters because slippage directly affects how much crypto you get or pay, especially in DeFi markets with low liquidity or high volatility. Most swap interfaces let users set a slippage tolerance, such as 0.5% or 1%, which is the maximum price difference they are willing to accept before the transaction fails. For example, if you expect to receive 1,000 tokens and set 1% slippage tolerance, the trade may still go through if you receive at least 990 tokens.
Other terms in DeFi
AMM
An automated market maker is a DeFi protocol that uses liquidity pools and algorithms to price and swap crypto assets without a traditional order book.
Aggregator
A DeFi service that searches multiple protocols to find better prices, routes, or yields for a user’s transaction.
DEX
A decentralized exchange is a crypto marketplace where users trade directly from their wallets using smart contracts instead of a central intermediary.
DeFi
A blockchain-based financial ecosystem that lets people lend, borrow, trade, and earn yield without traditional banks or brokers.