Slippage

Understanding Slippage on DefiTuna

When you interact with decentralized exchanges or liquidity pools, you’re often exposed to a concept called slippage. Slippage is the difference between the price you expect when initiating a transaction and the actual price at which the transaction is executed.

If the market moves too much during the short window between drafting and executing your trade, your transaction may execute at a worse price than you intended. To prevent this, DefiTuna lets you set a slippage tolerance—the maximum percentage deviation you are willing to accept. If the price moves beyond this threshold, your transaction will simply fail instead of filling at an unfavorable rate.

On DefiTuna, there are two types of slippage controls depending on how you use the platform:

To modify the Slippage settings, click the cog icon in the top navigation bar, adjust the parameters, and select Save Changes to apply.

Swap Slippage

Swap Slippage applies when you are executing a token swap. It represents the maximum price difference (in %) you’re willing to tolerate between the expected swap price and the actual execution price.

For example, imagine you want to swap SOL for USDC. If you set your slippage tolerance at 1% and the market shifts by 2% before the transaction is confirmed, the swap will not execute. This setting is crucial when trading in volatile markets or with tokens that have low liquidity, as their prices can change quickly.

Amount Slippage

In addition to swap transactions, DefiTuna also applies slippage controls when you add or remove liquidity. This is called Amount Slippage.

Amount Slippage defines how much your deposit or withdrawal can deviate from the expected amount. If the change exceeds your chosen tolerance, the transaction will revert. For example, if you set Amount Slippage at 10% and the number of tokens you’d receive for withdrawing liquidity shifts unfavorably by more than 10%, the transaction will not complete.

This safeguard is particularly important for liquidity providers, as pool ratios and prices may shift while your transaction is being processed. By setting your Amount Slippage, you make sure you don’t end up depositing more or withdrawing less than intended.

Ultimately, the slippage settings give you control. By tuning Swap Slippage and Amount Slippage according to your strategy, you protect yourself against unwanted outcomes while ensuring your transactions have the best chance of execution.

Last updated