TradingIntermediate#Execution#Risk
Slippage
S
Definition
The difference between a quoted or expected trade result and the result that can execute under the protocol's state and limits.
Source reviewed
- Uniswap Developers: v2 swaps opens in a new tab
Supports: Documents AMM rather than order-book execution, liquidity pools, reserve changes, and constant-product swap mechanics.
- Uniswap Developers: trading overview opens in a new tab
Supports: Documents minimum-output and maximum-input execution bounds and warns that zero minimum output exposes a contract to price manipulation.
Concept Diagram
Key Takeaways
1
Slippage compares a quote with execution, and can arise from pool state, price movement, routing, fees, or ordering
2
AMM output depends on the specific pool, route, trade size, fees, and execution-time reserves
3
Minimum output and maximum input are execution bounds, not a promise that a quote will be achieved
4
A reverted transaction can still consume network fees; choose limits based on the trade and loss tolerance
Practical Example
A swap interface quotes 100 tokens. The trader sets a minimum output of 98 based on their own limit. If the route can only return 97 when the transaction executes, the contract reverts; if it returns 98.5, it can execute even though the earlier quote was 100. The quote and the percentage are not a forecast.
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Related Terms
Trading
Tick SizeThe smallest permitted price increment for an order on a specific trading venue and market. It is a venue rule, not a universal property of the asset or a measure of execution quality.
Trading
Post-Only OrderA venue-specific limit-order instruction intended to prevent immediate matching so the order rests on the book if accepted. Exact cancellation, rejection, adjustment, and fee behavior depend on the venue.
Strategy
TWAP (Time Weighted Average Price)An execution method that schedules parts of an order across a defined time interval. Its schedule, sizing, slippage controls, fill behaviour, and result are venue- and configuration-specific.
Blockchain
DEX (Decentralized Exchange)An exchange design that uses blockchain transactions, smart contracts, or an onchain order book to match or execute trades. Custody, operator roles, access controls, fees, execution, and protections vary by protocol and jurisdiction.
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