Pricing & Fees
Slippage vs. Price Impact: What Is the Difference?
Separate the effect your trade size has on a liquidity pool from price movement while a transaction is pending, and understand slippage limits.
Price impact
In an automated liquidity pool, the size of a trade can change the pool’s asset ratio and the price available under its rules. This effect caused by your own trade is called price impact and depends on pool depth and trade size.
Slippage
Slippage is the difference between the price or amount expected when a swap is prepared and what is realized when it executes. Prices can move while a transaction is pending, for example as other trades occur. The terms are related but not interchangeable: price impact concerns your trade’s effect on a pool; slippage concerns execution changing from the expectation.
Some applications allow a slippage-tolerance limit. If execution falls outside that range, the transaction may fail; if it stays inside, it can execute at a worse price than expected within the allowed range. Tools and rules vary by protocol.
A simple example
Hypothetically, a large swap may noticeably affect the price in a shallow pool before submission. While the transaction is pending, other trades may then move prices. The first is the trade’s pool impact; the second is execution changing while it waits.
Key takeaway
Check liquidity and trade size, and understand price impact, slippage, and any tolerance limit shown in the interface. A limit does not guarantee a fixed price or a successful transaction.
Related reading
Official sources
This article is for informational purposes only and is not a price quote.