Slippage occurs when a trader settles for a different price than expected between the time they submit a transaction and the time it is confirmed on the blockchain.
Why Slippage Happens
- High Volatility: Prices in crypto move fast. By the time your transaction hits a block, the price may have shifted.
- Low Liquidity: In pools with low liquidity, a large order can significantly move the price (Price Impact).
Setting Slippage Tolerance
Most wallets (like MetaMask) or DEXs (like Uniswap) allow you to set a percentage. If the price moves more than your tolerance (e.g., 0.5%), the trade will fail to prevent you from getting a bad deal.
Slippage vs. Price Impact
Slippage is the difference between the price you expect and the price you actually receive. Price impact is the amount your own order moves the market because the pool is not deep enough. They often appear together, but they are not the same problem.
| Scenario | Main cause | Better response |
|---|---|---|
| Small liquid trade | Volatility or pending block delay | Use a tight tolerance, such as 0.1% to 0.5%. |
| Large trade in thin pool | Your order consumes too much liquidity | Split the order or avoid the pool. |
| Newly launched token | Volatility, taxes, MEV, or bad pool design | Use extra caution and test exits first. |
| Transaction keeps failing | Tolerance is too tight or liquidity is moving | Recheck the pool instead of blindly raising tolerance. |
Why High Slippage Can Be Dangerous
Some traders raise slippage tolerance until a transaction succeeds. That can be expensive. A high tolerance gives the market, bots, or malicious token logic more room to fill your order at a worse price. In meme coins and brand-new launches, extreme slippage can also hide transfer taxes or honeypot behavior.
How TokenRadar Applies This
TokenRadar treats slippage as a market-quality signal. A token with high volume but shallow liquidity can still be hard to trade safely. When evaluating a token, compare volume, liquidity depth, and market cap together. If volume is high but available liquidity is low, the market may be noisy rather than healthy.
Practical Rules
For large-cap tokens, keep slippage tight and use limit orders where available. For thin decentralized pools, calculate how much of the pool your order represents before submitting. If a trade needs a double-digit slippage setting, treat that as a warning rather than a normal setting. The goal is not just to enter a position; it is to know you can exit without giving up a large share of the trade value.