Price Impact vs Price Slippage
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Both concepts describe a deviation between the price you expect and the price you actually receive. The difference lies in what causes the deviation.
Price impact
Price impact is the price movement your trade itself creates by altering the ratio of tokens in the pool. It is deterministic: given a pool's reserves and your trade size, the resulting price shift can be calculated exactly before you submit the transaction.
- Larger trades relative to pool depth → greater price impact.
- Splitting a trade across multiple pools or executing smaller orders reduces it.
Price slippage
Slippage is the difference between the expected execution price at the moment you submit a transaction and the actual price at the moment the transaction is confirmed. It is caused by other transactions that land on-chain before yours — changing the pool's state in the interim.
- High network congestion → longer confirmation times → more opportunity for slippage.
- Setting a slippage tolerance protects you: the transaction automatically reverts if the execution price deviates beyond your threshold.
Side-by-side comparison
| Price impact | Price slippage | |
|---|---|---|
| Cause | Your trade's effect on pool reserves | Other trades executing before yours |
| Predictability | Deterministic — calculable before submission | Stochastic — depends on mempool activity |
| Mitigation | Smaller trades, deeper pools, split routing | Tighter slippage tolerance, faster confirmation |
| Who moves the price | You | Other market participants |
For a deeper explanation of both mechanisms, see Swaps.