What is ‘slippage’ in cryptocurrency, and why does it matter?

Hey monsters, it’s time for another #LiquidLearning article! Today we’ll cover a term you’ve probably heard before; Slippage. So why does it matter?

Slippage is what describes the efficiency of an executed trade. When you place a trade, you expect it to occur at a set price; however, due to a few underlying factors, this price can change slightly before the trade has been completed. This difference between the expected price and the final settlement price is slippage. It happens regardless of if a transaction is buying or selling an underlying asset. Slippage can occur in all types of markets — Equities and Bonds are also no stranger to slippage. However, it is much more prevalent in crypto markets due to the asset class’s extreme movements.

Setting slippage

When you trade on a sexy DEX such as ApeSwap.finance, the default slippage is set to 0.5%. This can be adjusted on the fly and will allow you to set a tolerated level of slippage in order to complete the trade. If the trade cannot be completed without exceeding this acceptable level of slippage, then it fails.

Can I avoid slippage?

So you’ve got this far and just want to know how you can avoid this nuisance. Unfortunately, slippage is here to stay and something we all have to deal with, but there are a few tricks you can use to keep it to a minimum.

  • Trade assets with high liquidity. High Liquidity = Low Slippage
  • Check out the price impact and split larger orders over time.
  • Avoid trading during volatile moves.

To summarise, slippage is commonplace within the crypto ecosystem and is something to consider before completing a transaction to maximize your returns and avoid miscalculated losses.

Thanks for reading monsters!

We hope this article was useful to you and you have picked up some valuable knowledge to aid in your crypto adventure!

Please follow our social networks to stay up-to-date.

Website: https://liquidcollectibles.io

Twitter: https://twitter.com/LiqCollectibles

Telegram main group: https://t.me/LiquidCollectibles

Telegram news channel: https://t.me/LiquidCollectiblesNews

Discord: https://discord.gg/tR8hMsDhQh

See you next time, monsters!

--

--

--

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

New Listing on Huobi Global & AMA Recap

CryptoBrewMaster partners with Velas, joins Velas Grant Program

ChainSwap X Celer Network | cBridge to be Integrated into ChainSwap’s Cross-chain Aggregator

Top 10 Most significant Stock Exchanges in the World as per Market Cap!

Top 10 Most significant Stock Exchanges in the World as per Market Cap!

DeFinance Project Update #2 November Monthly Report

Koi Labs Closed $5.3 Million Fundraising With Series Pre-A and A Round at $45 Million Valuation

5 Reasons Why Being a BTC Holder Is One of the Best Things That Has Ever Happened to You!

5 Reasons Why Being a BTC Holder Is One of the Best Things That Has Ever Happened to You

Introducing DS (Digital Securities) protocol: Securitize’s Digital Ownership Architecture for…

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
LiquidCollectibles

LiquidCollectibles

More from Medium

How to understand Metatopia

Announcing the Spaceborne Concept Trailer: Our Mission in the Metaverse

Zam.io x Oracula AMA Recap

BabyCake 2.1 Launches with Expanded Utility