Setting slippage tolerance
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 6 min
In short
Slippage tolerance is a ceiling: how far from the quoted price you will still accept execution. Set it too tight and the trade reverts, costing gas for nothing; set it too wide and it can fill at a far worse price than you expected. The default is usually right — widen it only when a trade fails, and only by as little as it takes.
Key points
- Tolerance caps how far the price may move and still execute — it is not a fee setting
- Every notch wider is room you have personally granted for a worse fill
- A wide tolerance on a thinly traded token makes you an easier target for front-running
- If trades keep failing, reconsider the size or the timing rather than only the tolerance
Definition
A setting on a DEX that specifies how much difference between the quoted price and the executed price you will accept. If the move exceeds the limit, the transaction reverts instead of filling.
Start with why the setting exists. Between submitting a transaction from your wallet and it actually executing in a block, time passes — and if someone else's trade goes through the same pool in that gap, the price moves. The quote you saw and the price you get will therefore differ. Slippage tolerance is how you decide, in advance, how much of that difference you will live with.
The control generally sits behind a gear icon or a 'settings' panel on the swap screen. Interfaces differ, so rather than memorising a button name, make it a fixed step: look at the tolerance field once before every execution. Most DEXes ship a default, and running with that default first is the safer way to find out whether it works for your trade.
The question of whether to widen it only arises when a trade fails. If it reverted because of price movement, the tolerance may have been too tight. Raise it in small increments and retry rather than jumping to a large number. A reverted transaction still costs gas, but the money lost to a badly unfavourable fill is usually the larger of the two.
Sometimes widening does not help at all. If your size is large relative to the pool, the price impact itself is the problem, and raising tolerance simply means accepting that impact. Splitting the order, routing differently, or dropping the trade are more sensible responses. Price impact and slippage tolerance are two separate numbers — read both.
One structural point worth remembering: a wide tolerance is someone else's opportunity. Pending transactions can be visible on-chain, and a trade with generous tolerance can be sandwiched — pushed to the edge of that tolerance and then unwound — for profit. Treat your setting as the ceiling on what someone else may take from you.
Watch out for
- · A trade with a generously wide tolerance invites a sandwich attack — the price is pushed to the edge of your setting and then released, and you fill at that edge
- · A reverted transaction does not refund its gas. Repeated retries pile up fees with nothing to show for them
- · Widening tolerance does not guarantee execution. On an extremely thin pool, or a token engineered to refuse sales, no setting will get you through
Frequently asked questions
What percentage should I set?
No figure can be given here — the right value depends on the pool's depth, your size and how the price is moving at that moment. The principle is to leave the default alone and raise it minimally only when a trade fails. Habitually running a large value means accepting that much loss on every trade.