Understanding Slippage
Slippage occurs when a trade executes at a different price than expected. This typically happens in two scenarios: 1. Low liquidity markets where large orders move the price 2. Fast-moving markets where prices change between order submission and execution
For example, if you submit a market order to buy when the displayed price is $100, but it executes at $100.50, you've experienced 0.5% slippage.
Slippage can be: - Positive: Executing at a better price than expected - Negative: Executing at a worse price than expected
Most perpetual DEXes allow traders to set a "slippage tolerance"—the maximum acceptable difference from the quoted price. Orders exceeding this tolerance will fail rather than execute at unfavorable prices.
To minimize slippage: - Trade on high-liquidity platforms - Use limit orders instead of market orders - Split large orders into smaller sizes - Avoid trading during high volatility periods - Check the order book depth before trading
For RWA perpetuals, slippage can vary significantly between markets. Major pairs like Gold or EUR/USD typically have lower slippage than niche commodities due to higher trading activity.