Slippage is the difference between the expected execution price of a trade and the actual price at which it fills. In AMMs, slippage is a deterministic function
Slippage
Slippage is the difference between the expected execution price of a trade and the actual price at which it fills. In AMMs, slippage is a deterministic function of trade size relative to pool depth — larger trades move the price further along the bonding curve. In order book markets, slippage arises from walking the book: a market order consumes resting limit orders at increasingly worse prices. DEX aggregators mitigate slippage by splitting trades across multiple pools to achieve the best weighted average execution price. Traders typically set a slippage tolerance (e.g., 0.5%) when submitting transactions — if the execution price moves beyond this threshold, the transaction reverts. Sandwich attackers exploit high slippage tolerance settings by front-running trades to push the price to the maximum tolerated slippage, extracting value at the trader’s expense.
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