Why Do You Sometimes Receive Less Crypto Than Expected? Understanding Slippage
Have you ever checked how much crypto you should receive from a swap, only to get a slightly different amount after the transaction? One possible reason is slippage.
Slippage is the difference between the price you expect when placing a trade and the price at which the trade actually executes.
What causes slippage?
A few common factors can affect your swap:
🔹 Low liquidity: When a trading pool doesn't have enough liquidity, even a small swap can move the price.
🔹 Large trades: Swapping a large amount compared with the available liquidity can cause a bigger price impact.
🔹 Market volatility: Prices can change quickly while your transaction is being processed.
How can you reduce slippage?
Before confirming a swap, check the estimated amount you'll receive and the price impact. Make sure the slippage tolerance is appropriate for the market conditions. Setting it too low may cause a transaction to fail, while setting it too high can expose you to a worse execution price.
It's also worth remembering that slippage tolerance is not a guarantee of the final price, and transaction fees are a separate cost.
How does this matter on a DEX?
Decentralized exchanges often use liquidity pools to facilitate swaps, so liquidity and pool pricing can directly affect the amount you receive.
If you're learning about decentralized trading, "STON.fi" https://ston.fi/cross-chain-swap-from-ton-to-base is one place to explore how token swaps work on TON.
My main takeaway is simple: don't look only at the token price. Check liquidity, price impact, fees, and the expected amount received before confirming a swap. A few seconds of checking can help you avoid unpleasant surprises.
#STONfi #DeFi #TON
$GRAM $STON
Have you ever checked how much crypto you should receive from a swap, only to get a slightly different amount after the transaction? One possible reason is slippage.
Slippage is the difference between the price you expect when placing a trade and the price at which the trade actually executes.
What causes slippage?
A few common factors can affect your swap:
🔹 Low liquidity: When a trading pool doesn't have enough liquidity, even a small swap can move the price.
🔹 Large trades: Swapping a large amount compared with the available liquidity can cause a bigger price impact.
🔹 Market volatility: Prices can change quickly while your transaction is being processed.
How can you reduce slippage?
Before confirming a swap, check the estimated amount you'll receive and the price impact. Make sure the slippage tolerance is appropriate for the market conditions. Setting it too low may cause a transaction to fail, while setting it too high can expose you to a worse execution price.
It's also worth remembering that slippage tolerance is not a guarantee of the final price, and transaction fees are a separate cost.
How does this matter on a DEX?
Decentralized exchanges often use liquidity pools to facilitate swaps, so liquidity and pool pricing can directly affect the amount you receive.
If you're learning about decentralized trading, "STON.fi" https://ston.fi/cross-chain-swap-from-ton-to-base is one place to explore how token swaps work on TON.
My main takeaway is simple: don't look only at the token price. Check liquidity, price impact, fees, and the expected amount received before confirming a swap. A few seconds of checking can help you avoid unpleasant surprises.
#STONfi #DeFi #TON
$GRAM $STON