Slippage

Slippage is the difference between the price you expected to pay for something and the price you actually ended up paying. It happens because markets are constantly moving, and by the time your order is processed, the price may have shifted slightly — or sometimes significantly — from what you saw on your screen. Think of it less as a mistake and more as a natural friction that comes with trading in fast-moving markets.

The main reason slippage occurs is a mismatch between supply and demand at any given moment. If you want to buy a large amount of a cryptocurrency but there aren’t enough sellers willing to sell at your target price, your order will start “eating through” the available sell orders at progressively higher prices. The bigger your order relative to the available market depth, the more slippage you’ll experience. Slippage can work in your favor too — if prices move in your direction between when you place and when your order fills, you might actually get a better price than expected.

Example: Imagine you’re at a farmers market and you see apples for $1 each. You decide to buy 100 apples, but the vendor only has 30 at $1 — the next 30 are $1.10, and the last 40 are $1.25. You wanted to pay $100 for all of them, but you actually paid $114. That gap between your expected $1.00 average and your actual average price is slippage. In crypto, this happens constantly, especially with less popular tokens that don’t have many buyers and sellers at any given moment.